Bitcoin (BTC) Rebounds Over $68K, Boosting Perpetual Futures Activity

Bitcoin
prices
have
seen
a
robust
rebound,
surging
past
$68,000
and
triggering
a
notable
increase
in
perpetual
futures
activity.
This
price
recovery
has
brought
significant
relief
to
the
Short-Term
Holder
(STH)
cohort,
with
75%
of
their
coins
now
held
in
profit,
according
to

Glassnode
Insights.

Perpetual
Futures
Market
Dynamics

The
perpetual
futures
markets,
which
are
the
most
liquid
trading
venues
for
digital
assets,
have
seen
substantial
activity.
Binance,
Bybit,
and
OKX
dominate
this
space,
accounting
for
approximately
84%
of
the
total
open
interest.
A
new
model
introduced
by
Glassnode
tracks
the
sensitivity
of
leverage
and
open
interest
in
these
markets
relative
to
changes
in
the
spot
Bitcoin
price.

Open
interest
in
perpetual
futures
has
fluctuated
between
220,000
and
240,000
BTC
throughout
2024.
However,
since
early
June,
this
range
has
increased
to
between
260,000
and
280,000
BTC,
indicating
a
higher
appetite
for
speculation.
Notably,
the
top
three
exchanges
have
seen
significant
changes
in
open
interest,
often
due
to
margin
call
liquidations
of
traders
holding
highly
leveraged
positions.

Market
Pivot
Points

Glassnode’s
analysis
identifies
pivot
points
in
the
perpetual
market,
marked
by
substantial
reductions
in
open
interest
due
to
liquidations.
Over
the
past
year,
there
have
been
ten
such
deleveraging
events,
each
resulting
in
a
notable
decrease
in
open
interest.

The
recent
sell-off
to
$55,000
highlighted
a
significant
long
liquidation
event,
leading
to
a
sharp
decline
in
open
interest
across
major
exchanges.
The
perpetual
funding
rate,
a
metric
indicating
the
directional
bias
of
positions,
showed
that
demand
for
long
positions
has
waned
since
the
market’s
peak
at
$73,000
in
March
2024.

Short-Term
Holder
Profitability

The
recent
price
surge
has
positively
impacted
Short-Term
Holders,
who
serve
as
a
proxy
for
new
demand
and
recent
buyers.
This
group
saw
over
90%
of
their
supply
fall
into
a
loss
in
late
July,
but
the
rally
has
returned
75%
of
their
held
supply
to
an
unrealized
profit.
The
Short-Term
Holder
MVRV
metric,
which
measures
profitability,
has
now
recovered
above
the
break-even
level
of
1.0.

Further
analysis
of
the
Short-Term
Holder
MVRV
metric
by
age
breakdowns
shows
that
all
sub-groups
of
recent
buyers
have
returned
to
positive
profitability.
This
trend
is
likely
to
bolster
overall
investor
sentiment.

Net
Realized
Profit/Loss

Examining
the
net
realized
profit/loss
for
each
sub-cohort
reveals
constructive
improvements,
with
most
age
groups
experiencing
positive
capital
flows.
The
exception
is
the
1-month
to
3-month
cohort,
which
has
borne
the
brunt
of
recent
range-bound
and
downward
price
actions.

Summary
and
Conclusions

Perpetual
futures
markets
remain
the
most
liquid
instruments
within
digital
asset
markets.
The
recent
BTC
price
drop
to
$53,000
led
to
a
significant
deleveraging
event,
with
many
long-biased
traders
being
liquidated.
However,
the
subsequent
price
recovery
has
returned
a
majority
of
Short-Term
Holders
to
an
unrealized
profit,
supported
by
net
positive
capital
inflows
in
recent
weeks.

Disclaimer:
This
report
does
not
provide
investment
advice.
All
data
is
for
informational
and
educational
purposes
only.
Users
are
solely
responsible
for
their
own
investment
decisions.

Exchange
balances
are
derived
from
Glassnode’s
database
of
address
labels,
using
both
published
exchange
information
and
proprietary
algorithms.
Accuracy
is
strived
for,
but
figures
may
not
always
reflect
an
exchange’s
reserves.
Users
should
exercise
caution
and
discretion.

Image
source:
Shutterstock