May was ETH's ETH-approved market month: the OI and leverage ratio (OI / reserve) increased along with the ETH price. The problem is that the leverage ratio is rising without the price rising.
The problem is also on the BTC side: the ratio is inversely correlated even though the marketcap / OI ratio is rising in price. since 2023, the marketcap / OI ratio and price have been basically correlated. The simple view is that the cash market has maintained a good environment, with OI increasing as funds flowed in and liquidity increased.
However, in May, the Marketcap / OI ratio has been inversely correlated: the CME OI has increased significantly, while the CEX OI has become highly leveraged. If there is a change in on-chain indicators before macro events (e.g. FOMC on 10 June), the utmost caution should be exercised.
Written by Crypto_Lion