SignalQuant
The futures market is now overheating again!
'High levels of open interest' lead to sharp price movements, mostly down. During the FTX crash in Nov '22, the already high level of open interest decreased as its price went down immediately after the FTX crash. You might say that it just happened as expected, but I think it is not necessary to gamble on such a price volatility if you know what whales would try to do to take advantage of the overheated futures market. FYI, the current open interest has been increasing since Sept ’23 but is not at a level that would trigger a large-scale liquidation. However, it can be reached the liquidation zone quickly at any time, so be aware of volatility in that case.