It's Never What It Seems
Perhaps an all too common tale in our day and age; just how much can we trust the data?
We are approaching some really interesting levels in some of the most popular cryptocurrencies and crypto-proxies in the equity markets. This post isn’t meant to be a comprehensive opinion on the broad market or the potential macro headwinds that I think could have an impact in the short to medium term. But I wanted to give you guys a updated view of one of the crypto assets that I’ve been trying to pay more attention to.
Many of you who have followed me for a while may recall that I generally think it makes sense to have some dry powder at all times.
This market is notorious for having large cascading sell events that typically take place when futures gamblers get offsides to an extreme degree. Heading into the end of last year, open interest (OI) on futures contracts hit a peak of $42.75 billion. We’ve seen that figure pull back to about $38 billion today. But with ETF approvals now having set in, I’m starting to think we may see some of this OI get washed out before we can have another leg higher in the major blue chip cryptos.
Total market futures OI is still ahead of the pre-Terra Luna collapse of $35 billion in the spring of 2022. Which is interesting and impressive to be honest. The trends in most of these assets look somewhat similar and are inline with the broad trend that can be observed the chart above. However, there are some outliers.
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