1. Open interest has dropped to its lowest level of the year. This decline typically reflects two things: 1) investor capitulation, or 2) investor apathy. Historically, periods of apathy and low participation have often marked attractive buy-the-dip opportunities.
2. Excessive leverage usually acts as a drag on market direction. However, as prices have recently rebounded, leverage levels have normalized, reducing systemic risk.
Conclusion
The decline in open interest signals both capitulation and disinterest among investors, while the reduction in leverage indicates fading speculative behavior. Together, these factors suggest that the market is now in a much healthier and more sustainable state—all it needs is a positive catalyst to ignite the next move upward.
Written by COINDREAM
