Bitcoin open interest falls 13.5% ahead of busy policy expectations

While all eyes are on the US Senate and the Federal Reserve, data from Santiment shows that the Bitcoin market had already repositioned itself last week. Bitcoin open interest fell by 13.5% between 3 and 11 September, while the price was only 5% lower over the same period. That difference indicates that this was not a price effect, but a deliberate choice by traders to scale back risk.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin open interest fell from 321,497 BTC on 3 September to 278,151 BTC on 11 September, a decline of 13.5%.
• The decline occurred before this week’s busy policy expectations, not after.
• Since 11 September, open interest has risen slightly for two sessions in a row.

Positioning already 20% lower than before the August rally

According to Santiment, open interest measured in Bitcoin stood at 321,497 BTC on 3 September. By 11 September, that had fallen to 278,151 BTC, a difference of more than 43,000 Bitcoin. Because the price fell by only 5% over the same period, this is not a mathematical effect caused by the price change.

Current open interest is therefore around 20% lower than the level before the mid-August rally. That indicates how many positions have been reduced in recent weeks. Bitcoin is currently trading around $77.700, a slight increase of 0.5% in the past 24 hours.

Market moved before the headlines

Santiment states that the decline in open interest came to a halt on 11 September and has since picked up slightly again. The repositioning therefore already took place in the run-up to this week, not in response to the political and monetary decisions themselves.

This week, the vote on the cloture procedure in the Senate and the Fed meeting are on the agenda. Earlier this month, a significant liquidation of long positions was also observed in Ethereum in the run-up to the FOMC decision. Santiment concludes that the market has already made its move, and that upcoming headlines may have less influence on positioning than is usually expected.