The increasing futures open interest of the BNB and regulatory problems put a strain on the market.

The increasing futures open interest of the BNB and regulatory problems put a strain on the market.

The BNB rally in 2022 and the recent negative performance of 90 days could indicate that investors no longer believe that the premium is justified. In order to analyze the demand for leverage during underperformance, you should consider the open interest in the BNB futures markets.

The open interest, i.e. the number of active contracts, has increased in the past few weeks, which has to be evaluated positively. A higher open interest enables institutional investors to be participated in the appointment markets. An increase in open interest also indicates a stronger participation of the dealers.

The open interest in BNB futures rose from $ 355 million on July 5 to currently $ 476 million, which has been close to the highest level in 18 months. This shows that the demand for leverage is increasing with the help of concepts.

However, the open interest alone does not indicate a bullish or bear atmosphere among professional investors. To assess this more precisely, we look at the futures bonus or the base rate. Ideally, the futures premium should be between 5 and 10 % to compensate for dealers to "record" their funds until the contract run. A premium below this area is bearish, while a premium of over 10 % indicates excessive optimism.

Currently, the futures premium for BNB is negative, which means that empty sellers pay 10 % a year to keep their positions. This negative premium was not unusual for BNB in ​​the past, but only occurred for short periods of time. As a rule, a negative premium led to a drop in prices, while a positive premium led to a price increase.

It is possible that investors sell BNB futures contracts empty in order to empty and trigger Spot order books. Another possible explanation for the high futures premium is blocking periods in which BNB owners are not allowed to sell their positions but still want to reduce their risk. These blocking periods can arise from formal contracts or restrictions by smart contracts.

The current derivative data indicate that there is an increased interest in leverage from editons, in particular due to short positions, in view of the negative premium. This exerts pressure on the BNB price as long as the futures premium remains negative. However, there is no guarantee that the price movement will be repeated.

Finally, it should be noted that this article only offers general information and should not be regarded as legal or investment advice. The views and opinions expressed here come exclusively from the author and do not necessarily represent the views of cointelegraph.