Key points

• Bitcoin traded around $82,800, down more than 2% in 24 hours, per CoinDesk.
• Futures open interest stood at 652,000 BTC, down from a peak of 800,000 earlier this year, according to Coinglass.
• Annualised perpetual funding rates averaged minus 0.3% across major exchanges.
• Gold fell 3% in 24 hours to about $4,150 an ounce, while the dollar index rose above 101.
• The 10-year Treasury yield is above 5.2% and the 30-year yield above 5.51%, with TLT near $79.

Bitcoin futures open interest has dropped to 652,000 BTC, one of its lowest levels this year, as traders close leveraged positions and bearish bets dominate, CoinDesk reports. The decline in open interest, which measures the number of active futures bets, comes as bitcoin trades around $82,800, down more than 2% in 24 hours.

Data from Coinglass shows open interest peaked at 800,000 BTC early this year before sliding to the current level. CoinDesk describes the fall as a capital exodus from the bitcoin futures market, with traders staying away from leveraged plays even though bitcoin rose 40% in the third quarter. The capital still in the market appears skewed toward bearish positions.

Perpetual funding rates have flipped negative again, hovering at an average of minus 0.3% across major exchanges. Because every long is matched by a short, funding rates show which side is more eager to hold its trade. A negative rate means short sellers are aggressively chasing the trade and are willing to pay longs to keep their bearish bets open, which CoinDesk reads as a sign of bearish sentiment.

Futures bets near yearly low

The price drop followed President Donald Trump declining to rule out further strikes on Iran before the U.S. midterm elections. Even so, bitcoin remains more than $20,000 above its summer cycle low and is still the best performing asset of the third quarter, according to the article.

Gold is also under pressure, down 3% over the past 24 hours to around $4,150 an ounce. The bitcoin to gold ratio, which measures how many ounces of gold one bitcoin can buy, is approaching 20 and is on the verge of turning positive for the year.

Meanwhile, the dollar index has climbed above 101 as U.S. Treasury yields continue to rise. The 10-year yield is above 5.2% and the 30-year yield is above 5.51%. A resilient U.S. economy may be supporting both the dollar and yields, though stubborn inflation concerns could also be pushing borrowing costs higher.

Shorts pay to stay bearish

Higher yields mean lower bond prices, and TLT, an exchange-traded fund holding long-dated U.S. Treasuries, has fallen to around $79, an all-time low. Rising yields also make interest-bearing assets more attractive relative to bitcoin and gold, neither of which pays income.

Read the full article on CoinDesk →