Bitcoin Rallies From $57,000 as Futures Positions Shrink: What’s Behind the Surge?

Despite Bitcoin rising from $57,000 to above $80,000 since June, futures positions have fallen to their lowest level of the year, pointing to the source of the buying driving the rally.

According to an analysis reported by CoinDesk using CoinGlass data, open interest in Bitcoin futures fell to 625,000 BTC. This measure, which shows the size of contracts that have not yet been closed, stood at 644,000 BTC the previous day and 650,000 BTC two days earlier. The latest reading was the lowest since January 1.

The futures market shrank as prices rose

The decline in futures positions is not limited to the past two days; the downward trend began in June. Over the same period, the price of Bitcoin rose from $57,000 to above $80,000. Thus, the rise over several months was not accompanied by an increase in positions in the futures market.

The analysis views this divergence as a sign that the rally has been supported largely by spot buying, meaning direct purchases of Bitcoin. The decline in futures positions as prices rise suggests that a different kind of demand is behind the move than increasingly large leveraged trades.

Bitcoin near $83,000 in the short term

After a rally lasting several months, the short-term price outlook is calmer. Bitcoin was trading at around $83,164 on the morning of September 30 in Europe, down about 1% over the past 24 hours; it had reached as high as $84,400 during the U.S. session the previous day.