Key Takeaways
- • Bitcoin perpetual futures open interest has kept building since Oct. 14, with positions accumulating on both long and short sides, according to market analyst Murphy.
- • Saturday's price decline did not trigger deleveraging, as open interest was not reduced during the pullback.
- • Entity-based realized losses on Bitcoin fell rather than rose, a signal Murphy cited against forced selling.
- • Murphy expects market makers and hedge funds to adjust positions when trading resumes Monday, Oct. 26, and anticipates a larger volatility move.
Summary
Market analyst Murphy reported that Bitcoin (BTC) perpetual futures open interest has continued to rise since Oct. 14, with positions building on both the long and short sides. Open interest measures outstanding contracts, and the source notes that it kept accumulating during pullbacks, including Saturday's decline, which did not reduce it.
Murphy assessed that the move may have reflected pressure from assets already deposited on trading platforms during thin weekend liquidity. He also said entity-based realized losses on Bitcoin fell rather than rose, which he read as evidence that the decline did not produce the forced deleveraging typically seen in stressed markets.
Looking ahead, Murphy said market makers and hedge funds would adjust their positions when the workweek resumes on Monday, Oct. 26. He expects a larger move in volatility and said the next key question is which side of the market gets triggered first.
Murphy assessed that the move may have reflected pressure from assets already deposited on trading platforms during thin weekend liquidity. He also said entity-based realized losses on Bitcoin fell rather than rose, which he read as evidence that the decline did not produce the forced deleveraging typically seen in stressed markets.
Looking ahead, Murphy said market makers and hedge funds would adjust their positions when the workweek resumes on Monday, Oct. 26. He expects a larger move in volatility and said the next key question is which side of the market gets triggered first.
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