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New record for the open interest of Bakkt’s bitcoin futures on bitcoin
New record for the open interest of Bakkt’s bitcoin futures on bitcoin
Bitcoin

New record for the open interest of Bakkt’s bitcoin futures on bitcoin

By Marco Cavicchioli - 14 Feb 2020

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Bakkt’s open interest in bitcoin futures yesterday reached a new all-time high at $17.32 million. 

Already on February 3rd it had reached a new all-time high exceeding $11 million dollars for the first time, but the next day also exceeded $12 million dollars and on February 6th was exceeded, for the first time, $15 million dollars. 

It is certainly no coincidence that these new records have been reached in recent days, coinciding with the return of the price of bitcoin around $10,000, so that there are those who assume that they are due to institutional investors, namely the main market players who use Bakkt futures contracts. 

In fact, institutional investors are generally more inclined to use derivatives, rather than investing directly in crypto-assets, in addition to the fact that thanks to futures they can also get some hedging from the risk. 

Among other things, the open interest of CME bitcoin futures in recent days is also high, although not at an all-time high, having reached $313 million for the first time since July 2019. 

Recall that CME BTC futures are settled in dollars, while Bakkt futures are settled in BTC. 

However, there is also another very interesting indicator related to the fluctuations in the price of bitcoin, announced by PlanB on Twitter

This is the so-called RSI, or Relative Strength Index, which is back at 60. By the end of 2018, it had reached a new low of just over 40, rising to 70 in June 2019 and falling back to 50 in December 2019. 

In the chart published by PlanB, you can also see how there seems to be a correlation between the historical curve of this indicator and the distance in days from halving. 

The latter is expressed with various colors, i.e. with blue dots that refer to the days just before halving and red dots that refer to the days just after. 

At this moment the colour of the indicators is dark blue because we are getting closer to halving, and if we compare the current level of RSI with the level at the beginning of 2016 or mid-2012, i.e. when the indicators had the same colour because the same number of days were missing from the next halving, we find that the RSI was very similar. 

Indeed, in 2016 it was even at 60, before rising to 70 on halving days and falling back to 60 in the two months following halving and then rising to 95 in the following year and a half. 

Although the 2015-2016 sequence cannot be perfectly superimposed on the 2018-2019 sequence, the trend so far seems to be very similar. 

This does not at all mean that the 2020 trend will certainly follow the 2016 trend, but that there is a certain probability that this will actually happen. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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