Bitcoin Open Interest Falls Below 365-Day Average as Spot Demand Weakens

Bitcoin's derivatives open interest growth has slowed and spot demand has weakened again, fueling caution over the cryptocurrency's short-term recovery, AMBCrypto reported.

On Oct. 19, the crypto-focused media outlet said Bitcoin's seven-day moving average for open interest fell below its 365-day moving average this month. It was the second time this has happened since Aug. 25.

Open interest refers to outstanding derivatives contracts, including futures and options, that have not been closed. A short-term average falling below the long-term average can signal that speculative demand in the derivatives market has weakened versus earlier levels.

Spot Bitcoin exchange-traded funds also posted net outflows for a second consecutive week. A total of $678.9 million left in the week ended Oct. 9, after $228.4 million in net outflows the previous week. Even so, spot Bitcoin ETFs still recorded net inflows of 15,400 BTC over the past 30 days.

Spot demand is weakening as well. XWIN Japan, citing CryptoQuant data, said Bitcoin spot demand briefly approached neutral levels earlier this month before turning negative again. Futures demand, by contrast, has remained relatively firm.

AMBCrypto said Bitcoin would need stronger inflows into spot ETFs, a recovery in spot demand and continued accumulation by holders to stage a stable recovery.