The more consistent the positions are, the more likely it is that when the market reverses, they will end up stepping on each other; first, identify the crowded area.
$QNT : Rate -0.2078%, with open interest/position of 54.73M. For this kind of setup, the key thing is to see whether positions continue to build up. Those looking to catch the rebound should move a bit slower—first see whether there’s willingness to step in and stand up in the market. It’s not necessarily going to go up; on the short side, things are already a bit crowded.
$US : When it’s crowded, first look at three things: Rate -0.0388%, positions 11.01M, and the 15m price/position change +0.62% / +0.07%. This kind of book is easiest to make shorts think it can still drop—then one sharp rebound (a single counter-pull) throws everything off. Shorts are paying to pressure the market; if they can’t hold it down, someone may run first.
$AXS : The contract “temperature” here is: Rate -0.0331%, positions 10.79M, short-term price/position +0.37% / +0.09%. With this kind of market, once the shorts loosen their grip, the price becomes more sensitive than you’d expect. Shorts aren’t without strength; it’s just that to keep pressing down now, they need a much larger sell order.
$QNT : Rate -0.2078%, with open interest/position of 54.73M. For this kind of setup, the key thing is to see whether positions continue to build up. Those looking to catch the rebound should move a bit slower—first see whether there’s willingness to step in and stand up in the market. It’s not necessarily going to go up; on the short side, things are already a bit crowded.
$US : When it’s crowded, first look at three things: Rate -0.0388%, positions 11.01M, and the 15m price/position change +0.62% / +0.07%. This kind of book is easiest to make shorts think it can still drop—then one sharp rebound (a single counter-pull) throws everything off. Shorts are paying to pressure the market; if they can’t hold it down, someone may run first.
$AXS : The contract “temperature” here is: Rate -0.0331%, positions 10.79M, short-term price/position +0.37% / +0.09%. With this kind of market, once the shorts loosen their grip, the price becomes more sensitive than you’d expect. Shorts aren’t without strength; it’s just that to keep pressing down now, they need a much larger sell order.
