Bitcoin's volatility bomb is getting bigger and bigger

Bitcoins-volatility-bomb-is-getting-bigger-and-bigger

While BTC price has been bearish in the 2nd half of 2022 with several sharp drops, it has done the opposite in the 1st half of 2023 with several corrections. While liquidation volumes have not been significant(blue band) since the FTX crisis in Nov 2022, open interest has been gradually increasing over the same period. 

The current level of open interest is not far off from the highest level in 2022, and whenever open interest reaches a high level (yellow band), there is a massive liquidation that causes open interest to rapid decrease . 

While the recent spike in BTC price hasn't triggered any liquidations, so it's likely that its price has been driven by spot rather than futures, it's important to note that if futures bets increase in the future, an excessively high open interest level could lead to large price fluctuation due to big liquidations.