Good Afternoon from BitOoda! The CFTC just released its Commitment of Traders (COT) report for the fiscal week through Dec. 10.
We see that there is finally an uptick in open interest (OI) from the last few weeks. As an overall metric, we still see OI on the lower end of the spectrum and as of Dec. 12th it was only 116 million.
With Bitmex’s Open interest currently at $684 Million. This is towards the higher end of the spectrum.
We continue to view this as negative for potential realized volatility in the short term. Assuming the COT as OI for institutional investors and BitMex OI for retail and high net worth individuals, we could potentially see a set up to buy vol in the new year if the CME/Bakkt OI grows. We believe that could help the futures market and will help lead the way for realized vol like it has in the past.
This scenario is set up well and with the retail market already having a lot of exposure, we would expect the moves to follow through back down to 6k or test the 10k level on a 3-month time horizon. In the short term, we don’t believe such moves are plausible.
Have a great weekend from BitOoda, and if you have any questions or concern please reach out to firstname.lastname@example.org