When BTC fell below $10,000, open interest fell by $653 million

The open interest of futures on Bitcoin (BTC) has recently marked the worst daily loss in the last five months. Yesterday’s 11% drop caused more liquidations than May 9, when BTC fell 12.5% to $8,600.

Skew’s data show a loss of $653 million for open interest, which on September 3 had reached 4 billion. This figure includes perpetual contracts (reverse swaps) and futures on OKEx, CME, Binance and other derivatives exchanges.

Yesterday’s movement represents the biggest daily drop from the terrible cascade of 1 billion dollars on 13 March, which caused the price of Bitcoin to fall by 50%. In the same day the worst sell-off of the Dow Jones Industrial Average since 1987 has occurred, a loss of 10%.

The drastic correction did not cause negative records in the stock markets, but the Nasdaq Composite fell by 5%, driven by Apple (AAPL -8%), Salesforce (CRM -7.8%) and Microsoft (MSF -6.2%).

On September 3, Apple shares (AAPL) fell 8%, translating into the disappearance of $180 billion from its market capitalization. This is the worst daily loss for a single company. For comparison, Bitcoin’s market capitalization is currently 189 billion dollars.

The iPhone company is currently valued at just over $2 billion, which could buy the entire altcoin market, even paying a premium of 1.300% for the current aggregate market cap of $140 billion.

The futures premium has momentarily disappeared.
Futures markets tend to present a small premium over exchange spots. This is not the exclusive property of crypto markets, but rather an effect of derivatives. Usually sellers ask for more money to postpone the financial settlement of a transaction.

This indicator based on the premium of futures contracts is known as a basis, and generally oscillates between annual rates of 5% and 15%. When the premium is positive, market conditions are defined by the term contango. Conversely, a negative futures contract premium is unusual and indicates bearish sentiment.

3-month annual basis for BTC futures

The chart above shows the importance of the short fall below $10,000 for the futures markets. A negative premium scenario, known as backwardation, was last recorded four months ago on May 10. During that period, Bitcoin Evolution recovered rapidly over the next three days, bringing the base indicator back into positive territory.

The current annual base of 4% cannot be considered bearish, although undeniably less bullish than the 10% level observed three days ago.