The ratio of the 24-hour Open Interest [OI] change and market cap seemed to highlight an interesting trend on the question of which coin is the most leveraged in the market. Interestingly, the most leveraged cryptocurrency isn’t Bitcoin or any other crypto in the top 10 of CoinMarketCap’s charts. In fact, the most leveraged cryptos included Sushi, VeChain, and other low cap altcoins.
Source: ViewBase
What does this mean?
Implication 1
Since the market cap and price of these altcoins are relatively low, it is easy to manipulate the price of these altcoins. Hence, a reason behind their overleveraged positions could be to manipulate prices.
Implication 2
Anticipated announcements from the coin or insider trading based on such updates could be the reason why people are trading these coins. Consider this – Until a few hours ago, the most leveraged coin was Sushi, following which, VeChain took its place.
In fact, VET was recording an OI change of -$17 million over the last 24-hours or a 58% OI change.
While this was in consideration of -ve OI change, let’s take a look at +OI change percent. In this case, it was RSR [a stablecoin] which had the most contracts opened over the last 24 hours.
Source: ViewBase
This flow of RSR was coming from the Huobi exchange. Interestingly enough, the same trend can be seen with VET, both of which have been seeing massive activity happening on Huobi.
Source: ViewBase
As for Sushi, there seemed to be an even spread of OI coming from Binance, FTX, and other exchanges in the crypto-market.
What about Bitcoin and Ethereum?
Since Bitcoin, Ethereum and other top 10 coins in the market have significantly higher OIs, they also have higher liquidity. Hence, overleveraging isn’t really easy with these cryptocurrencies. As for VeChain, it could be just plain ol’ manipulation in play, perhaps, a pump and dump or insider trading in anticipation of an announcement.
