Miners “massively” accumulate Bitcoin, derivatives market peaks – Opportunity or challenge for BTC?

The majority of Bitcoin miners are now hoarding more BTC than at any point in the past five months, but the derivatives market game still carries significant risks, which could have a major impact on Bitcoin price reaction.

Diggers "ồ at" Bitcoin accumulation, derivatives market peaking - Opportunity or challenge for BTC?
Miners “oh at” accumulate Bitcoin, derivatives market peaks – Opportunity or challenge for BTC?

Bitcoin price may have disappointed investors over the past two months, but it has barely had a significant impact on long-time market participants. Seasoned miners are no exception, they have significantly increased their BTC holdings in the first two weeks of 2022.

The graph shows the cumulative position change of Bitcoin miners. Source: Glassnode
The graph shows the cumulative position change of Bitcoin miners. Source: Glassnode

Over the past week has seen over 5,000 BTC per day added to miner replenishment, with actual accumulation going stronger since before Bitcoin’s ATH at $69,000 was set in September. 11.

Another data from CryptoQuant also highlights the extent to which miners have regained their BTC since the crackdown in China on the crypto mining and trading sector that began in May. reserves are 1,859 million BTC as of Jan. 12, a record high for late 2020 after BTC surpassed its old 2017 peak.

Bitcoin miner's reserve. Source: CryptoQuant
Bitcoin miner’s reserve. Source: CryptoQuant

– See more: Bitcoin hashrate establishes ATH, is it strong enough to help BTC recover strongly?

Besides, the leverage ratio in the Bitcoin derivatives market is growing at breakneck speed. This represents extreme excitement to Bitcoin price action as a bet, rather than long-term steady demand for BTC in the spot market.

Open interest is the total value of all open contracts on the futures market, displayed in BTC terms. Open interest has hit an all-time high of 264,000 BTC in the face of recent price drops, up 42% since December 4 and surpassing 258,000 BTC set on November 26.

Open interest Bitcoin on the derivatives market. Source: Glassnode
Open interest Bitcoin on the derivatives market. Source: Glassnode

Besides, Bitcoin’s market share of long liquidation contracts has reached 69%, the highest level in a year. In 2021 alone, there have been more than 100 billion USD liquidated in the derivatives market and three different big “pitfalls” including Bitcoin’s $8,000 “break” in just 1 hour in April, phase 2. plummeted from $52,000 to $48,000 in September and the sell-off event to $42,000 in early December.

However, no matter how big the backing comes from the accumulation of miners or large global investment institutions, the growth index in futures contracts inevitably poses a certain threat. could sink Bitcoin at any time.

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