Arcane Research: Volatility in the Crypto Market Could Increase

The ratio of open interest (OI) in futures and perpetual contracts for Bitcoin and Ethereum to their capitalization has reached a record. Arcane Research analysts believe that against the backdrop of the current consolidation, this may be a harbinger of a sharp increase in volatility.

OI to capitalization in digital gold has reached 3.21%, whereas in the case of Ethereum, it amounts to 4.24%.

The company’s experts have noticed that this ratio is kept near the peaks, despite the past The Merge. Leading up to this event, many players were hedging or taking directional positions.

To mitigate the potential “brutal” deleveraging, experts suggested using straddle strategies, which allow users to bet on a structural shift in volatility.