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Data shows Polkadot crashes after reaching $1B open interest — Will it happen again?
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Whenever there is relevant growth in the number of derivatives contracts currently in play (open interest), it usually means that more traders are involved.
In futures markets, longs and shorts are balanced at all times, but having a larger number of active contracts allows the participation of institutional investors that require a minimum market size.
However, in Polkadot's (DOT) case, price crashes have often been anticipated by this indicator breaking the $1 billion mark.
The April 17 crash happened after DOT reached its $48.30 all-time high, which led to a $1.2 billion futures open interest. Over the following week, the altcoin dropped 45% to $26.60, driving the number of active contracts to a $600 million equivalent.
Three weeks later,
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