Bitcoin has observed some sharp price action today, and if data of these metrics is to go by, the asset may not be done being volatile just yet.
Bitcoin’s Open Interest And Leverage Ratio Have Remained High
As explained by an analyst in a CryptoQuant post, some metrics are forming a pattern that can lead to more volatility in the cryptocurrency’s price. These indicators are the open interest and the estimated leverage ratio.
The “open interest” refers to the total amount of Bitcoin futures contracts that are open on all derivative exchanges. An increase in this metric suggests that the investors are opening more positions on the futures market right now, while a decrease implies some of them are closing their positions, or are getting liquidated.
The other metric of interest here, the “estimated leverage ratio,” keeps track of the ratio between the open interest and the derivative exchange reserve (that is, the total amount of Bitcoin sitting in the wallets of these derivat
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