The bitcoin futures market looks like a crowded club with a tiny exit – and it could cause pain
The market may be facing a dangerous liquidity mismatch as futures open interest outpaces trading volume by a significant margin.
Source: CoinDesk
―
DW NOTE
Bitcoin's futures open interest has doubled trading volume — $48 billion in positions, $25 billion in daily turnover. In 2019-2020 it was the reverse: volume ran 2x to 3x above open interest. The shift means fewer contracts changing hands relative to the number held, which makes unwinding crowded trades harder when everyone heads for the door at once.