Bitcoin Open Interest Declines, Potentially Signaling Bull Market Rebound
CryptoQuant data indicates that Bitcoin's open interest in the derivatives market has decreased by approximately 30% since October of the previous year. Analysts suggest this "deleveraging signal" helps to clear excess leverage that had accumulated in the market. Historically, sharp declines in open interest have often preceded significant market bottoms, establishing a more robust foundation for a potential bullish recovery.
However, if Bitcoin prices continue to decline and enter a sustained bear market, open interest could shrink further. This scenario would imply deeper deleveraging and a prolonged correction period.
On October 6th of the past year, Bitcoin's open interest reached an all-time high exceeding $15 billion. Currently, the observed trend of price increases accompanied by declining open interest typically signifies the closure or liquidation of leveraged short positions. This "short squeeze" could be advantageous for Bitcoin, as price appreciation is driven more by spot buying rather than excessive leverage.
Despite these observations, derivatives provider Greeks Live notes that the derivatives market has not yet transitioned into a structurally bullish phase. The current trading structure is described as more of a passive reaction to sudden price surges.
South Korea Passes Legislative Amendments to Regulate Security Tokens
The South Korean National Assembly has approved amendments to the Capital Markets Act and the Electronic Securities Act. This legislative action formally establishes a regulatory framework for the issuance and circulation of security tokens (STOs), approximately three years after financial regulators initially issued related guidelines.
Key provisions within the amendments include the introduction of the distributed ledger concept. This allows issuers who meet specific conditions to directly issue and manage tokenized securities through electronic registration. A new entity, the "Issuance Account Management Agency," will also be established.
Furthermore, atypical securities, such as investment contracts, will now fall under the regulatory scope of the Capital Markets Act. These will be permitted to circulate in the over-the-counter (OTC) market through the establishment of a new OTC brokerage business.
The amended Capital Markets Act is set to take effect immediately upon promulgation. However, provisions related to investment solicitation guidelines will become effective six months after promulgation, while those pertaining to OTC trading will take effect one year after promulgation.
Binance's Spot Crypto Trading Market Share Hits Lowest Point Since Early 2021
Data from CoinDesk reveals that in December 2023, Binance's market share in cryptocurrency spot trading fell to 25%. This represents the lowest level recorded since January 2021 and is a significant decrease from its peak of nearly 60% observed in 2023.
Binance's market share in derivatives trading has also seen a decline, dropping from a high of approximately 70% to around 35%. Analysts indicate that trading activity migrating away from Binance has primarily shifted to non-US exchanges such as Bybit, HTX, and Gate. In contrast, US-based exchanges, including Coinbase, have experienced relatively limited growth in trading volume.
Concurrently, on-chain trading platforms like Hyperliquid are gaining traction for derivatives trading, signaling a substantial shift in the overall market structure.