Bitcoin has failed to break through the $31,000 barrier twice this week, with open interest in stablecoin-margined futures increasing on both occasions.
Bitcoin (BTC) has failed to establish a foothold above $31,000 twice this week. According to Coinalyze data, futures traders are most likely responsible for keeping the gains in check.
The first failed attempt occurred on Monday at 20:05 UTC, when prices reached a high of $31,040 before rapidly falling back to $20,200 by 21:55 UTC. The number of active stablecoin-margined (or linear) futures contracts related to bitcoin increased from around 230,000 BTC to 242,000 BTC as prices fell from $31,040.
A surge in open interest combined with a drop in price is thought to imply an influx of negative short positions in the market. Futures short positions are leveraged wagers that profit from a drop in the price of the underlying asset.
“Price action suggested shorts piling in as we approached $31,000,” crypto liquidity network Paradigm stated in a market update issued Tuesday, highlighting an increase in open interest as prices fell from $31,040.
A similar pattern was observed on Wednesday with the release of a softer-than-expected US consumer price index (CPI) report, which weakened the case for the Federal Reserve to maintain monetary tightening.
Bitcoin reached a high of $31,000 just after the US Labour Department issued the CPI at 12:30 UTC, only to fall down to $30,500 in the next hour.
The decline was matched once again by a spike in open interest in stablecoin-margined futures contracts.