Hi well, nice analysis, the best in the scene as always
However, I would like to make a consideration: the metric we are analyzing is an OI / market cap, and analyzing the context in which we view the metric we can say that we are in a bear market, therefore basically a phase in which the market cap has gone a long way. to decrease; having said that our denominator will be weaker than when we viewed the metric 6 months ago, while the OI has increased accordingly making our numerator stronger and perhaps that could be why we see an OI / market cap increasing so aggressively from about on March 28. Do you think this could be a plausible statement?
Furthermore, speaking of today, alongside an analysis of the trend of funding rates we can see that despite the bear market, they remained mostly positive values except in the local bottom phases, indicating that for the most part they were long to ask for more financial leverage. Wading the movement seems like a natural breath in a bear market trend, making me more comfy as we go up in saying that the most probability I have it down.
Furthermore, also consider that the financial markets (especially American) have been enveloped by positive air, anticipating a reversal of the fed, which at the moment personally looking at the data I still see unlikely, perhaps mr.market is too far ahead this time, and has forgotten that in macroeconomic dynamics such as these, seeing a market increase is counterproductive for the fed, as a rising market is creating wealth, in a context in which the fed is trying to reduce it to discourage spending in order to slow down demand.
Hi Syymon, JJ here. Thank you for reading my article and thank you for the kind and informative words.
I'm not really too sure what to make of things. I just found the chart to have some interesting patterns I wanted to share, I think the Jarvis team is diving into it deeper and will be able to shed more light on their opinions (that's probably why I found the chart in the quant room!) but I agree it's really confusing right now.
We just don't know who this OI interest belongs to or what their logic is, but maybe we'll start to get better clues soon. At least I hope!!
In my experience day trading, Price down and OI up means a healthy downtrend, especially with other factors like high volume and negative delta. It means new fresh shorts pushing price down. So currently the ball is getting pushed waaaay underwater. In BTC's history, the ball tends to pop up with force. This happens because the shorts in the OI close up gently or get forcefully liquidated, spurring cascading liquidations squeezing price into big green dildos. After, ideally OI and volume follows price up for confirmation of a real trend imo. However, I wonder with record levels of OI as shown, maybe some shorts are 'late' to the party here.... This setup looks like a MASSIVE short squeeze in the making, the likes of which culminate in many multiples in a very short amount of time (talking months, not years).....If only there was a catalyst, like a whiff of fed pausing, maybe with lower cpi reading next week? hmmm
hmmm seems like you and my other friend Syymon above have 2 totally different ideas in mind what these means. I'm learning a bunch just from you guys sharing your experience so thank you for commenting, what do you think about his idea that its just a natural part of the bear market + funding has been mostly flat to positive?
Hi Ben, great update. You're suggesting that the OI build up is mostly longs, right? The last three OI reductions and following concolidations (May, June, July) seem like shorts closing after price dropped. If price is protected to the downside it would make sense that the rising OI is mostly longs. But curious to hear more on this as well. Also, why are there no metrics of how OI is comprised in terms of volume?
I wish I knew! I think it's hard to tell whether this interest is short or long. That's why I just looked at it like "hmmm ok, well what happens every other time price has been down while open interest is up" just to see what usually happens. Not too sure if it will repeat but it sure was interesting to see the past examples!
This is a way different market than 2020-2021 though, but I think but it always helps to be mindful of history. At least that's what I always hear the analysts guys saying at Jarvis (:
Nice articel. First question which comes to my mind to dive deeper in that by myself: Is there any TV Indicator avaliable for us plebs to get the total Derivates OI compared to Market Cap, so the one you use here? Is that a free Indi or a jarvis intern indi and if so, any possibility you could make the indi open? Thanks in advance and keep up the great work guys!
Thanks for reading Chris. Everybody I know who trades uses the Jarvis Labs metrics here: https://www.tara-nft.com/ there's tons of charts and metrics on there including this OI one that I found the team studying!
Thanks for the reply! Just saw that i need an NFT to get access. Even wanted to buy one because i know that you guys usually do great stuff but floor price is 2 ETH which is too expansive for me to test the metrics out :/ will there be another mint in future with a more affordable price?
Yeah, been following this also bc it was a good metric to follow for allmost 2 years.
I think the grow of stable coins m.cap and the usage of stable margind contract needs to be factored in now days when looking at this metric.
Hi well, nice analysis, the best in the scene as always
However, I would like to make a consideration: the metric we are analyzing is an OI / market cap, and analyzing the context in which we view the metric we can say that we are in a bear market, therefore basically a phase in which the market cap has gone a long way. to decrease; having said that our denominator will be weaker than when we viewed the metric 6 months ago, while the OI has increased accordingly making our numerator stronger and perhaps that could be why we see an OI / market cap increasing so aggressively from about on March 28. Do you think this could be a plausible statement?
Furthermore, speaking of today, alongside an analysis of the trend of funding rates we can see that despite the bear market, they remained mostly positive values except in the local bottom phases, indicating that for the most part they were long to ask for more financial leverage. Wading the movement seems like a natural breath in a bear market trend, making me more comfy as we go up in saying that the most probability I have it down.
Furthermore, also consider that the financial markets (especially American) have been enveloped by positive air, anticipating a reversal of the fed, which at the moment personally looking at the data I still see unlikely, perhaps mr.market is too far ahead this time, and has forgotten that in macroeconomic dynamics such as these, seeing a market increase is counterproductive for the fed, as a rising market is creating wealth, in a context in which the fed is trying to reduce it to discourage spending in order to slow down demand.
Hi Syymon, JJ here. Thank you for reading my article and thank you for the kind and informative words.
I'm not really too sure what to make of things. I just found the chart to have some interesting patterns I wanted to share, I think the Jarvis team is diving into it deeper and will be able to shed more light on their opinions (that's probably why I found the chart in the quant room!) but I agree it's really confusing right now.
We just don't know who this OI interest belongs to or what their logic is, but maybe we'll start to get better clues soon. At least I hope!!
In my experience day trading, Price down and OI up means a healthy downtrend, especially with other factors like high volume and negative delta. It means new fresh shorts pushing price down. So currently the ball is getting pushed waaaay underwater. In BTC's history, the ball tends to pop up with force. This happens because the shorts in the OI close up gently or get forcefully liquidated, spurring cascading liquidations squeezing price into big green dildos. After, ideally OI and volume follows price up for confirmation of a real trend imo. However, I wonder with record levels of OI as shown, maybe some shorts are 'late' to the party here.... This setup looks like a MASSIVE short squeeze in the making, the likes of which culminate in many multiples in a very short amount of time (talking months, not years).....If only there was a catalyst, like a whiff of fed pausing, maybe with lower cpi reading next week? hmmm
hmmm seems like you and my other friend Syymon above have 2 totally different ideas in mind what these means. I'm learning a bunch just from you guys sharing your experience so thank you for commenting, what do you think about his idea that its just a natural part of the bear market + funding has been mostly flat to positive?
Hi Ben, great update. You're suggesting that the OI build up is mostly longs, right? The last three OI reductions and following concolidations (May, June, July) seem like shorts closing after price dropped. If price is protected to the downside it would make sense that the rising OI is mostly longs. But curious to hear more on this as well. Also, why are there no metrics of how OI is comprised in terms of volume?
I wish I knew! I think it's hard to tell whether this interest is short or long. That's why I just looked at it like "hmmm ok, well what happens every other time price has been down while open interest is up" just to see what usually happens. Not too sure if it will repeat but it sure was interesting to see the past examples!
This is a way different market than 2020-2021 though, but I think but it always helps to be mindful of history. At least that's what I always hear the analysts guys saying at Jarvis (:
Nice articel. First question which comes to my mind to dive deeper in that by myself: Is there any TV Indicator avaliable for us plebs to get the total Derivates OI compared to Market Cap, so the one you use here? Is that a free Indi or a jarvis intern indi and if so, any possibility you could make the indi open? Thanks in advance and keep up the great work guys!
Thanks for reading Chris. Everybody I know who trades uses the Jarvis Labs metrics here: https://www.tara-nft.com/ there's tons of charts and metrics on there including this OI one that I found the team studying!
Thanks for the reply! Just saw that i need an NFT to get access. Even wanted to buy one because i know that you guys usually do great stuff but floor price is 2 ETH which is too expansive for me to test the metrics out :/ will there be another mint in future with a more affordable price?
dang sorry about that I didnt realize how much the market has bid these up recently. it makes since there will only ever be 500 of them.
keep an eye out for future product releases that we'll be offering to subscribers first (: