[Blockchain Today Correspondent Lee Ji-eun] According to Bitcoin (BTC) experts, open interest (OI), which means a position that has not been closed in the futures and options market, and a fixed funding rate cause “explosive” price volatility of Bitcoin. do.
Cointelegraph reports that if the Bitcoin derivatives market re-forms this year, a new prediction has emerged that the price of Bitcoin will experience explosive price volatility as a result of this impact.
According to the report (US time), Vetle Lunde, an analyst at cryptocurrency data analysis firm Arcane Research, tweeted on the 4th (US time), “BTC open interest has returned to an all-time high seen in November of last year. “He said.
Bitcoin futures and options were hit hard by the decline in Bitcoin prices at the end of last year, but as the holiday season draws to a close, consensus is starting to build on a massive rebound.
Some argue that institutional traders should become a major force in the Bitcoin market, and related derivatives are receiving renewed attention.
The OI has returned to its level in the third week of November, when it reached an all-time high of $69,000 for Bitcoin. However, one difference is that the funding ratio is neutral, which is a key basis for price volatility formation. “BTC-denominated open interest on Bitcoin perpetuals today crossed their November highs, and looks explosive due to the accumulated leverage at a level slightly below the neutral to neutral funding ratio,” said Betre Lund.
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