Sorry bulls, Bitcoin bears are taking the helm of the cryptocurrency market for now. In the past 24 hours, the BTC price has shed some $400, with the leading digital asset falling all the way to $9,500.
With this, coupled with the lull that the cryptocurrency market has seen over recent weeks, the Chicago Mercantile Exchange’s BTC futures contracts have begun to see investment demand seemingly evaporate.
In fact, as cryptocurrency data provider Skew Markets notes, daily volume for the CME’s Bitcoin markets has fallen to some $300 million — a far cry from the $1.6 billion all-time high seen in June. Also, during this same time span, open interest in these BTC contracts has collapsed from $380 million to $200 million.
> 50% of CME bitcoin futures open interest set to expire this Friday
The lull in the CME’s Bitcoin futures seems to be a result of the lack of volatility (save for today’s blip) and volume in the overall cryptocurrency market. However, it could also be deemed a bearish sign for BTC.
A Bearish Signal
You see, institutions have been widely touted as the main group of investors behind 2019’s rally, despite the narrative that cryptocurrency is once again going “mainstream”.
Bloomberg, citing data from blockchain analytics firm TokenAnalyst, has confirmed that fewer retail traders have been involved in this rally than in 2017. The number of addresses using Bitfinex has reached a two-year low; Binance has seen incoming BTC transactions fall to early-2018 levels. Sid Shekhar, the co-founder of TokenAnalyst, said the following on the statistics:
“[The low number of incoming transactions suggests a] lack of retail interest in general currently in crypto. If we go by the ‘Bitcoin as safe haven in times of recession’ narrative, the number of new users/buyers should actually be increasing.”
Google Trends data corroborates this analysis. Below is a chart outlining search interest for the term “Bitcoin” from the start of 2017 to now. In it, you can clearly see that interest in the leading cryptocurrency spiked in late-2017, when Bitcoin started to reach levels where it is currently trading now.
The idea here: the fact that search interest for “Bitcoin” is still sitting at bear market levels implies that only investors that already know about this market are investing in crypto.
And more likely than not, especially considering that Bitcoin’s trading volume has entered the dozens of billions this year, those remaining trading cryptocurrencies are the diehards and institutions.
A further lack of activity in CME markets may imply that institutions are currently not excited about cryptocurrency, and are thus keeping from siphoning capital into this space.