Key Points
- Bitcoin and Ethereum experienced declines in September, with a surge in long liquidation volume.
- Despite the drops, there was no significant sell-off, indicating a stable market.
Bitcoin [BTC] and Ethereum [ETH] ended the month of September with a considerable amount of volatility. The market was primarily controlled by traders in short positions, which resulted in an increase in long liquidation volumes.
However, the lack of a significant sell-off suggests a positive outlook for the market.
Open Interest in Bitcoin and Ethereum Declines
CryptoQuant reports that the open interest (OI) for Bitcoin and Ethereum saw significant drops during the last trading session. Bitcoin’s open interest fell from $18.6 billion to $18.1 billion, indicating a closure of futures positions by traders.
This reduction in OI generally indicates a decrease in liquidity, volatility, and interest in derivatives trading, which could potentially lead to a long/short squeeze.
Ethereum’s open interest also saw a decline, although not as significant as Bitcoin’s. As of now, BTC’s open interest has rebounded to $18.3 billion, and ETH’s OI has increased to $9.4 billion, indicating renewed market activity.
Bitcoin and Ethereum Prices Follow OI Trends
The reduction in open interest directly impacted the prices of both Bitcoin and Ethereum. Bitcoin saw a 3.50% decline, falling from $65,600 to $63,301, dipping below its 200-day moving average.
Similarly, Ethereum experienced a 2.13% decline, from $2,657 to $2,601. However, it remained above its 50-day moving average, despite falling below its 200-day moving average.
At the time of writing, both assets have shown a slight rebound. Bitcoin was trading at $63,789 with a 0.7% increase, while Ethereum gained over 1%, trading around $2,639.
Exchange Flows Remain Steady
Despite the recent declines, there has been no significant sell-off. Data from CryptoQuant shows that Bitcoin recorded a negative exchange flow, indicating a balanced flow of BTC between exchanges and personal wallets.
Ethereum, on the other hand, saw a slight increase in exchange inflows, with 14,000 ETH flowing into exchanges during the last trading session. This volume, however, was not enough to trigger a major sell-off. Currently, the flow has turned negative again, with over 23,000 ETH being withdrawn from exchanges, indicating reduced selling pressure.
Although Bitcoin and Ethereum faced significant declines at the end of September, the lack of a major sell-off and the slight price rebound suggest a relatively stable market. The trends in open interest and exchange flows indicate that investors are not rushing to exit their positions, which shows potential for recovery in the near future.
