A prominent cryptocurrency expert has said that Bitcoin ($BTC) traders are ready for a “major move” on the market, at a time when the volatility of the flagship cryptocurrency has dipped below that of the S&P 500.
Open interest (OI), which indicates the total number of existing futures contracts that have not yet been resolved is close to its all-time high, as observed by renowned crypto analyst Satoshi Stacker in a post shared with more than 140,000 followers on Twitter.
Open interest gives a precise depiction of the market’s liquidity and interest since it reveals where money moves. Bitcoin’s volatility has fallen below that of the Nasdaq and S&P500 indexes for the first time since 2020, coinciding with Bitcoin’s virtually record-high open interest.
As reported by CryptoGlobe, experts have cautioned that Bitcoin’s decreased volatility combined with fewer trading volumes might lead to a massive market sell-off if the market turns negative.
In the meanwhile, CryptoCompare’s Bitcoin Volatility Index (BVIN), which is an “implied volatility index that also indicates the fair value of a bitcoin variance swap”, has decreased from almost 100 in September to its current level of 65.5.
According to Yassine Elmandjr, an analyst at Ark Investment Management, “low volatility in Bitcoin may not always be a positive thing, particularly if it’s on low volume.” According to the expert, BTC traded above $6,000 towards the end of 2018, but poor volume caused the price to drop to $3,000.