The amount of leverage in bitcoin perpetual futures relative to the cryptocurrency's market cap remains low, suggesting low odds of short-squeeze or liquidations cascade. Reports godbole17.
Long/short squeezes were quite common during the 2021 bull run and early bear market days of 2022 when the amount of leverage outstanding relative to the size of the market was quite high and price moves would shake outof leveraged trading positions. So far this year, the ratio has continued to drop.
"The medium-term trend of decreasing open interest/market cap has not been broken, which is reassurance that, even in the event of downward volatility, price is most likely not going to decrease to the level it was at to begin the year," analysts added. The perpetual futures open interest to market ratio has been falling since FTX, formerly the third-largest cryptocurrency exchange and one of the preferred avenues to trade perpetual futures, went bust in early November.
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