In the above graph, Green Channels show large volume for CME future contracts where Red Channels indicate small volume, the darker the colour, the more intense the volume. As you can see, the early Green Channels signal large volatility hence large price rises where low volume future contracts resulted in significant drops, now later along in March, Contract volumes steadily rose, in which its seems this increase in Fututes volume has taken the volatility out of the market.
MACD appears to be tightly entangled within the closing wedge, either this will limit future corrections or force an breakout with the amplitude of the wedge ranges from $6000 - $9000,
Latest futures trading data shows net-long traders are converting to shorts although currently longs have just over 2-1 lead, there is rumors longs are coming back into favor yet the trends show differently, as two-three weeks of reversal hint at perpetual shorts. Taking a view of traders and their attitudes, seems to exhibit pressure to force BTC prices low although changes in sentiment suggest a reversal of the BTC downtrend despite the fact traders remain net-long, this could change with current price action as low BTC price mean net-longs are lucrative.
We have declining open interest indicating the market is liquidating and could lead to current downward trend coming to an end. This is a contradiction as the overall Futures volume shows we can expect the existing trend to continue rather than reverse.
Here is CBOE views on it:
“The daily volume has mostly been concentrated in the near-month future and the open interest doesn’t change much from day to day,” said Gary Compton, a spokesperson for the CBOE, to Modern Consensus. “This could indicate that short term or day traders are concentrating on this contract. The farthest-dated contracts haven’t been trading too much"
"This shows that asset managers and institutional investors—pension funds, insurance companies, and the like—have switched from being completely short bitcoin to long the Cryptocurrency, at least when ti comes to the futures contract on the Chicago Board Options Exchange (CBOE)"
According to the COT report, “Asset manager/institutional” traders required to report to the regulator are now long a total of 220 contracts, worth a little above $1.7 million as of Monday. There are no new short contracts. Just two weeks before, they were short 110 contracts but long no contracts.
They are currently long 2,323 BTC contracts and short 953 contracts (for a net of 1,370 contracts). Two weeks ago, they were 2,531 contracts while short 815 (for a net of 1,716).
Using commodities index as a base for open interest volume, states Falling Price + Falling Contract Volume + Falling Open Interest represents a market that is Strengthening for an uptrend where the price decline is likely being caused by disgruntled net-long traders liquidating their positions on current price action. The market in this scenario is viewed as in an strong position because the downtrend will end once all the sellers have sold their positions.
Another option is Falling Price + Rising Open Interest + Falling Contract Volume is indicative of a weak market downtrend. During the course of the current trend, high and rising volume in Jan, Feb suggests trading activity supported the downward trend and that the trend continuation happened due to increased investors supporting overall downward price movement.