Bitcoin Market Activity Stagnates: Analyst Describes Perpetual Futures as a ‘Ghost Town’

A senior researcher from Glassnode highlights the current state of Bitcoin’s perpetual futures market, which has been experiencing low levels of Open Interest, reflecting a slowdown in speculative trading activities.

Key Takeaways

Bitcoin’s perpetual futures market is characterized by low Open Interest, which indicates muted trading activity.
A decline in Open Interest signifies that traders may be closing their positions or facing liquidation, leading to more price stability for Bitcoin.
The Funding Rate for perpetual futures has also decreased, showing a lack of confidence in long positions among traders.
As of now, Bitcoin is trading around $90,500, marking a 6% increase over the past week.

Bitcoin

The Status of Bitcoin Futures Market

In a recent update on X, CryptoVizArt.₿, a senior analyst at Glassnode, discussed the trend of Bitcoin’s Open Interest in the perpetual futures market. Open Interest indicates the total number of positions that are currently open on centralized derivatives platforms for Bitcoin.

When Open Interest rises, it often means that more investors are opening new positions, which can introduce fresh leverage and increase Bitcoin’s price volatility. Conversely, a decline in Open Interest suggests that traders are either voluntarily closing their positions or being liquidated. This trend can lead to more stable price movements for Bitcoin due to the reduction of leverage.

The following chart illustrates the behavior of Bitcoin’s perpetual futures Open Interest (denominated in BTC) over the past few months:
Bitcoin Open Interest

According to the chart, Bitcoin’s Open Interest witnessed a significant drop in October, triggered by a collapse in its price. After this liquidation event, the Open Interest stabilized around lower levels. By mid-November, there was a brief increase as the price continued its downward trend, nearing a point that appeared to be a bottom. However, since that peak, Open Interest has diminished again, falling back below 310,000 BTC, indicating that speculative interest in the market has waned.

This recent drop in speculative activity is mirrored by a decline in the perpetual futures Funding Rate, which gauges the periodic fees exchanged between long and short investors.
Bitcoin Funding Rate

The chart indicates a continuous decrease in the Bitcoin perpetual futures Funding Rate over time, reflecting a decrease in confidence among traders in maintaining long positions. CryptoVizArt.₿ has aptly referred to the perpetual futures market as a “ghost town,” citing the reduced trading activity.

Current Bitcoin Price

As of this writing, Bitcoin is trading at approximately $90,500, which represents nearly a 6% increase over the past week.
Bitcoin Price Chart

This trend showcases a steady gain, but the low levels of trading activity in the futures market indicate that investor sentiment may still be cautious.