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Use the LPOC indicator to gain insight into leverage risk and build an early warning system before a market crash
This selected article is translated from Frederik Theissen's (Inferring Leveraged Positioning from Price and Open Interest) by Benpaocaijing·Web3.0 Research Lab.
By analyzing price and open interest (OI) with the Leveraged Position Opening and Closing (LPOC) indicator, real-time leverage trends in the cryptocurrency market can be revealed. It identifies market tops, bottoms, and systemic risks more accurately based on superior funding rates and clearing data.
I. Understanding Crypto Market Leverage Dynamics
New Method for Position Tracking
Leverage is a core feature of the cryptocurrency market, driving and exacerbating booms and busts. Derivatives (especially crypto-native perpetual contracts) often trade volumes far exceeding spot, amplifying market sentiment and volatility.
By analyzing price and open interest (OI) with the Leveraged Position Opening and Closing (LPOC) indicator, real-time leverage trends in the cryptocurrency market can be revealed. It identifies market tops, bottoms, and systemic risks more accurately based on superior funding rates and clearing data.
I. Understanding Crypto Market Leverage Dynamics
New Method for Position Tracking
Leverage is a core feature of the cryptocurrency market, driving and exacerbating booms and busts. Derivatives (especially crypto-native perpetual contracts) often trade volumes far exceeding spot, amplifying market sentiment and volatility.
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