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Over the past few days, Derivative Market Power has bounced back from extremely low levels. After crashing to −559K, the index rose to −420K, reflecting the strongest bear pressure since April 2021. This pressure is now gradually easing: funding rates are softening, taker order imbalances are narrowing, and some short positions are being closed.
The index is formed as a daily aggregated value of OI × Funding × Taker-imbalance, where OI is the aggregate open interest in futures, Funding is the weighted average funding rate, and Taker-imbalance is the ratio of net market buy and sell flows.
Thus, DMP reflects the direction and strength of derivatives' influence on the spot market: deeply negative values indicate prevailing short pressure, while an upward reversal of the index from its minimum signals a weakening of this pressure.