Crypto open interest jumped as $650m of shorts were squeezed: where the data comes from

The useful part

As bitcoin pushed to around $85,000, roughly $650 million of bearish bets were forcibly closed, yet the total value of open derivatives positions rose rather than fell. What happened Bitcoin traded near $87,000 on Monday, extending its break above the early September high. Shorts made up about $648 million of roughly $747 million in liquidations over 24 hours, according to CoinGlass data, and open interest rose about 7.6% to around $156 billion despite the forced closures.

How it works

• On-chain analytics firm Santiment separately reported a similar 7.6% rise in market-wide open interest during the rally.
• The Bold News +4 Why crypto positioning data is available almost instantly The answer lies in how crypto derivatives markets are built.
• Because of that, exchanges publish open interest, the total number or value of contracts still open, through free public data feeds...
• Bitcoin shorts accounted for about $278 million of the liquidations and Ether shorts around $123 million.
• Short squeeze drives bitcoin toward $85,000 as $648 million shorts liquidated.

What to take from it

Crypto traders got a fast lesson in leverage on Monday. Most trading happens in perpetual futures, contracts with no expiry date, on large centralised exchanges. Unlike CME, where an exchange, a clearinghouse and separate brokers each play a role, these platforms perform all three functions themselves.

Details worth keeping

Trading volume over 24 hours rose about 39% to roughly $224 billion.