Squeeze 'em
Reports are circulating that futures open interest is back to all-time highs. With volatility this compressed, it looks like a lot of gamblers are (not) ready for their accounts to get liquidated.
G’day Folks,
Leverage is such an enticing tool, and yet it can be so very dangerous.
As emotional creatures, we can often convince ourselves that some future outcome is so certain that it clouds our judgement such that we put a little bit too much at risk.
I would wager that the majority of people reading this have taken a punt at futures or options trading at some stage in their Bitcoin journey.
I’d also wager that the vast majority have also experienced at least one true financial licking whilst doing so, where the market cleaned you out in a way that you will never forget.
The absolute worst result, is when you put on a fat leveraged bet…the market went in your direction just a little bit…then it tanked against you, took out your stop loss, and then proceeded to moon with great strength…without you on board the train.
We have all been there, and the key is to take it as a price paid for your market tuition.
The talk of the town over the weekend is futures open interest being at all-time highs.
Today’s post is going to be an assessment of this setup, to contextualise how I see the current state of derivatives leverage across the Bitcoin market.
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