Analysts warned that volatility could increase as open interest rises and futures traders step in.
According to CryptoQuant analysts, open interest in the latest surge has increased by $615 million in just a few hours. In general, open interest, along with funding rates, is a good indicator for analyzing the probability of which direction the price might end up going.
This time around, however, funding rates appear to be almost neutral. This means that long and short traders are almost in balance. Both sides (bulls and shorts) have increased leverage and will increase volatility in the short term.