Data shows that the Bitcoin whales that may have been helping drive the latest rally have switched to profit-taking instead.
Bitcoin Whales On BitMEX Have Changed Their Tune Recently
An analyst in a CryptoQuant Quicktake post explained that the BitMEX whales were likely the ones helping fuel the latest rally. The relevant indicator here is the “Open Interest,” which keeps track of the total amount of Bitcoin derivative positions open on a centralized exchange.
When this metric’s value increases, investors are opening up new contracts on the platform. On the other hand, a decline suggests the holders are either getting liquidated or closing up their positions of their own volition.
Now, here is a chart that shows the trend in the Bitcoin Open Interest for two exchanges, BitMEX and Binance, over the past few weeks:
Looks like the value of the metric has gone down for BitMEX in recent days | Source: CryptoQuant
The graph shows that the Bitcoin Open Interest on BitMEX had observed a sharp rise at the start of the month when the cryptocurrency’s price was still trading around the $38,000 level.
This open interest increase followed a sharp rally for BTC towards the $44,000 mark. As is visible in the chart, the indicator’s value for Binance also registered an increase as the rally occurred, but BitMEX’s rise stands out as it was huge and pretty much happened in one go before the rally.
Since BTC has hit its local top above the $44,000 level, though, the BitMEX Open Interest has plummeted, implying a large-scale closure of positions on the platform has taken place. On the other hand, the metric’s value for Binance has continued to stay high.
The quant has also attached charts of another metric for the two exchanges: the “Funding Rates.” The funding rates keep track of the periodic fee the derivative traders on an exchange currently pay each other.
When this indicator has a positive value, the longs are paying a premium to the shorts to hold onto their positions right now. This suggests that the traders on the platform share a majority of bullish sentiment.
The BitMEX Funding Rates had been favorable for the duration that the Open Interest had been at high levels, implying that most positions had been extended. However, with the plunge in the indicator, the Funding Rates have returned to neutral values.
Based on this pattern, the analyst thinks the BitMEX whales, potentially driving the rally earlier, have…
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