Bitcoin Open Interest Collapses to 12%. Is the Short Squeeze Over?

Crypto-margined Bitcoin futures have collapsed from near-total dominance to about 12%. But leveraged traders are still placing big bets.

The top 3

  1. How Open Interest is Calculated: Open Interest increases by one when a new buyer and seller open a contract, remains unchanged if an existing position is transferred, and decreases by one when both parties close existing positions.
  2. Impact of Collapsing Open Interest: A sharp drop in Open Interest typically signals that traders are closing leveraged positions, either voluntarily or due to liquidations, indicating a deleveraging event and potentially a market stabilization as excessive risk is removed.
  3. Top Exchanges by Bitcoin Open Interest: Major exchanges like Binance, OKX, and Bybit consistently rank among the top platforms for Bitcoin futures open interest, indicating where significant leveraged trading activity is concentrated.

Sources

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