Bitcoin

Crypto traders using options and futures to gain exposure to Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) are out of pocket a staggering $1 billion after the cryptocurrency crashed more than 14% from its new all-time high of $69,200 on March 5.&nbsp;
In a March 6 post to X, on-chain analytics provider Santiment <a href="https://twitter.com/santimentfeed/status/1765172609703108764" target="_blank" rel="noopener nofollow">wrote</a> that the total open interest (OI) on exchanges for Bitcoin, Ethereum (ETH), and Solana (SOL) declined significantly after the <a href="https://cointelegraph.com/news/bitcoin-price-sets-new-record-high-69k">BTC all-time high</a> the previous day.
Bitcoin open interest fell $1.46 billion (-12%) over the course of a few hours, while Ether’s (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) dropped $967 million (-15%), and Solana’s (<a href="https://cointelegraph.com/solana-price-index">SOL</a>) tumbled $424 million (-20%).
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 Open interest plummeted as Bitcoin’s price tanked. Source: Santiment
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The price of Bitcoin briefly notched a new all-time high just above $69,200 on March 5, only slightly higher than its previous peak of $69,044 in November 2021.
Santiment said that the vast majority of speculation on price came from traders opening long positions in anticipation of Bitcoin breaking through a new all-time high and holding above a price of $70,000. 
Meanwhile, a smaller portion of the flush came from short positions being liquidated as Bitcoin briefly touched a new all-time high. 
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 “In a way, we can view this open interest plummet as a sign that 'speculative excess' has been temporarily removed from the markets.”
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Related: <a href="https://cointelegraph.com/news/record-high-crypto-derivatives-daily-trading-volumes-deribit-coinbase">Crypto derivatives’ daily trading volumes reach record highs</a>
<a href="https://cointelegraph.com/explained/what-is-open-interest-in-the-crypto-futures-market">Open interest</a> refers to the total amount of open positions that traders have taken on a derivatives contract. When a trader opens a new position on a futures or options contract, it increases open interest. When a trader closes an existing position, it decreases.
Over the last few weeks, open interest has <a href="https://cointelegraph.com/news/bitcoin-futures-open-interest-near-alarm-raising-24b-level-are-bulls-at-risk">surged to record levels</a> as traders increased their bets on Bitcoin’s price action as it headed toward new highs.
While Bitcoin’s sudden downward price action may have spooked the market, many pundits took to X to explain that <a href="https://cointelegraph.com/news/btc-price-bearish-64k-5-things-bitcoin-this-week">derivatives flush-outs</a> are a normal part of price movements.
Crypto trader 'Daan Crypto Trades' <a href="https://twitter.com/DaanCrypto/status/1765107262488535493" target="_blank" rel="noopener nofollow">told</a> his 363,000 X followers, "After temporarily sweeping the all-time highs, we saw a sharp decline which saw a lot of longs being flushed out," before adding "About ~$3B in Open Interest was lost in this correction."
According to data from&nbsp;<a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noopener nofollow">Coinglass</a>, around 312,500 traders were liquidated with the total liquidations coming at $1.13 billion over the past 24 hours. 
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 Bitcoin's sudden downward move caused $1.13 billion worth of liquidations. Source: CoinGlass
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Bitcoin is currently changing hands for $63,600, down 8% from its new all-time high yesterday. 
Magazine: <a href="https://cointelegraph.com/magazine/wolf-of-all-streets-world-bitcoin-hits-1m-1-million-hall-of-flame/">Wolf Of All Streets worries about a world where Bitcoin hits $1M: Hall of Flame</a>

Bitcoin flash crash wipes $1B in ‘speculative excess’ from markets

Cointelegraph

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