Market Wrap: Cryptos Waver as Speculators Lose Interest

Open interest in the BTC futures market is starting to decline.

AccessTimeIconApr 8, 2022 at 8:23 p.m. UTC

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

Cryptocurrencies were mixed Friday, although selling pressure from earlier in the week appeared to be gaining steam.

Bitcoin (BTC) traded lower after failing to break above $44,000 during the New York trading day. Meanwhile, NEAR, the cryptocurrency powering layer 1 blockchain Near, rose by as much as 20% over the past 24 hours. WAVES declined by 10% and XRP was down by 3% over the same period.

The dispersion in crypto returns suggests uncertainty among traders after a near 7% dip in BTC over the past week. Further, alternative cryptos (altcoins) have fallen in and out of favor as investor sentiment shifts between bullish and bearish.

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Elsewhere, the S&P 500 was roughly flat on Friday, while traditional safe havens such as gold and the U.S. dollar traded higher. The 10-year Treasury yield reached a new three-year high at 2.7% as investors reduced their exposure to bonds amid rising inflation and higher interest rates.

Latest prices

Bitcoin (BTC): $42775, −1.63%

Ether (ETH): $3243, +0.49%

S&P 500 daily close: $4489, −0.26%

Gold: $1948 per troy ounce, +0.73%

Ten-year Treasury yield daily close: 2.71%


Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Shallow speculation

The bitcoin futures market has been relatively quiet, which suggests that BTC's 30% rise from its Jan. 24 low around $33,000 was driven by spot traders.

The chart below shows bitcoin's total open interest, or number of outstanding derivative contracts on the Chicago Mercantile Exchange (CME), which has ticked lower over the past week. Participation in the bitcoin futures market has waned since peak levels in November of last year, which preceded a 50% drop in BTC's price.

Still, the current level of open interest is higher than its previous range between May and September of 2021.

CoinDesk - Unknown

CME bitcoin futures open interest (skew)

Analysts also pointed to a reduction in leverage among bitcoin futures traders, which indicates lower conviction behind the latest price recovery.

Further, BTC's annualized rolling three-month basis, or the relative difference between the price of the future contract and the spot price, has declined across major exchanges over the past two weeks. That indicates uncertainty among traders about the future price of bitcoin.

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Bitcoin futures annualized three-month basis (skew)

Altcoin roundup

  • Axie Infinity builder takes ‘full responsibility’ for $625M Ronin hack: “These are the players who trusted us, and we failed to live up to that trust,” Sky Mavis co-founder Aleksander Larsen said on CoinDesk TV Friday. To prevent further exploits, Sky Mavis is adding more validators to Ronin. Axie Infinity's token AXS is down 20% over the past week. Read more here.
  • DeFi giant Yearn leads the way on ERC-4626 token standard adoption: Yearn Finance, a vault-based, decentralized yield aggregation platform, has become the first major protocol to publicly support the adoption of ERC-4626, providing a level of legitimacy and encouragement for others in the space to start exploring the usage of ERC-4626. Yearn's token YFI is down 76% from its all-time high in May of last year, compared with a 30% peak-to-trough decline in ETH. Read more here.
  • Top U.S. bank watchdog issues warning on stablecoins: The wildly different approaches the crypto industry has taken to designing and hosting stablecoins may be good for innovation but bad for practical and safe usage, argued Michael Hsu, the acting chief of the Office of the Comptroller of the Currency. Read more here.

Relevant reads

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Largest winners:

Asset Ticker Returns Sector
Cosmos ATOM +0.9% Smart Contract Platform
Dogecoin DOGE +0.5% Currency
Ethereum ETH +0.5% Smart Contract Platform

Largest losers:

Asset Ticker Returns Sector
Internet Computer ICP −4.4% Computing
EOS EOS −3.7% Smart Contract Platform
Solana SOL −3.7% Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

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Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

CoinDesk - Unknown

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

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