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Total open interest in the bitcoin futures market stands at $ 11.3 billion, down 59% from its April 13 peak of $ 27.3 billion according to Arcane Research.
The report says bearish trading indicates that institutional investors are cautious at the moment. He also notes that the three-month bitcoin futures contracts are offset, meaning they are traded at a discount from current spot prices. This is generally seen as a bearish signal.
Open interest on the Chicago Mercantile Exchange (CME) as a share of total bitcoin futures rose at the end of May, but is now trading lower. Open interest in the CME currently sits at 12.2% of the bitcoin futures market, according to the report. That puts it in fourth place, behind retail platforms Binance (22.5% of total open interest), OKEx (14%) and Bybit (12.9%).
I think it’s safe to say that institutional interest has waned, said Nathan Cox, chief investment officer at Two Prime. Cox said institutions remain greedy for crypto as a whole, but their ability to intervene is limited by recent market volatility.
Meanwhile, some note that the decline in futures activity indicates that other market players are pulling back as well.
What this shows is that a lot of retail traders were burnt out when the market started to fall, said Patrick Heusser, head of commerce at Crypto Finance AG.
Nonetheless, Two Primes Cox remains bullish that the big investors will buy the downside.
As things stabilize, I would expect large institutions to announce positions, likely accumulated in this pullback, he said.
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