KEY POINTS
Investors engaging in options and futures as part of their Bitcoin investment strategy faced challenges. The total losses amounted to approximately $1 billion when the digital currency’s value fell sharply by over 14% from its new peak of $69,200 on March 5.
The following day, on-chain analytics firm Santiment reported a notable decrease in the total open interest (OI) for Bitcoin, Ethereum (ETH), and Solana (SOL) across various exchanges, coinciding with Bitcoin’s record high.
Open interest refers to the total number of active positions in a derivatives contract held by traders. Opening a new position adds to open interest, while closing a position reduces it.
The open interest for Bitcoin suffered a reduction of $1.46 billion (a 12% decrease), while Ethereum’s open interest declined by $967 million (a 15% decrease).
Bitcoin briefly exceeded its previous peak, hitting slightly above $69,200 on March 5, surpassing the previous record of $69,044 from November 2021.
According to Santiment, most of this price surge was attributed to investors opening long positions in hopes of Bitcoin crossing the $70,000 mark. At the same time, short positions were liquidated as Bitcoin’s price briefly peaked.
The decrease in open interest could suggest a temporary reduction in speculative trading activity in the market.
In the weeks leading up to the event, open interest had climbed to unprecedented levels as investors speculated on Bitcoin’s potential to reach new heights.
According to Coinglass, approximately 312,500 traders were liquidated, with the total liquidations reaching $1.16 billion — all this in the last 24 hours.
