18 Oct 2021

Froth? - The open interest is high, but notorious retail platforms seem less frothy now, compared with March and April

The open interest is high at the moment, suggesting that the froth is picking up in the market. However, contrary to previous periods of high open interest, CME and FTX account for a substantial share of the global OI.
Source: Skew, Tradingview
The market structure seems different now, compared to the open interest spikes earlier this year, mostly attributed to dampened activity on Bybit. Bybit’s open interest has previously been a viable indicator of the market sentiment, particularly during the bull market in early 2021. During earlier periods of peak euphoria, Bybit’s open interest tended to spike and account for significant shares of the leverage in the market. This has yet to occur this time around. Binance, CME, and FTX are now the largest bitcoin futures exchanges. Binance’s market share has remained largely unchanged since June, while FTX’s market share has also stabilized. Meanwhile, CME’s market share has seen strong growth since early September, growing from 10% of the global open interest to 17.6% from September 1st till today. This indicates that institutional traders have led the strong momentum in the last month.
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