Bitcoin Open Interest Reaches Dangerously High Values, Leverage Flush Coming?

On-chain data shows Bitcoin open interest has reached dangerously high values, a sign that a leverage flush may be coming soon. Bitcoin Open Interest Rises To High Values As pointed out by an analyst in a CryptoQuant post, the BTC open interest has now reached values where mass liquidations have taken place in the past. The “open interest” is an indicator that measures the total amount of BTC futures positions currently open on derivatives exchanges. The metric accounts for both long and short positions. When the value of the metric is low, it means investors aren’t using much leverage right now. Such values usually result in low volatility in the price of Bitcoin. On the other hand, high values of the indicator suggest that futures contract users are currently using a high amount of leverage. This situation can lead to high volatility in the market as big price swings can result in a liquidation squeeze. Related Reading | Exchange Whale Ratio Suggests Bitcoin Dump Incoming Now, here is a chart that shows the trend in the BTC open interest over the past year: The indicator's value seems to be on the rise recently | Source: CryptoQuant As you can see in the above graph, value of the Bitcoin open interest looks to be climbing up in the last few weeks. The quant has marked in the chart the previous times the indicator showed similarly high values. It’s clear that at some point after reaching thes...