FCP cache best location

[ForkHandles]

Newbie to fcp.
I keep my library files on an external drive, I want fast and snappy editing on my M1 mini, I am less worried about fast rendering times.
Will moving the cache and backups to the internal drive make a significant difference to editing as thumbnails and pre rendered video have faster access?

 

[ColdCase]

It makes a noticeable difference when your working library is on internal memory, caches and backups not. What kind of external drive do you have, USB, Thunderbolt?

 

[Dockland]

Thinking about this aswell. Yesterday when editing just a couple of minutes of 4K (or UHD to be precise) footage, applying LUT and so on in FCP my internal drive om Mac Mini M1 filled up just after some ~30 minutes give or take.
I only have the 1TB version, but it seems strange that it reached 90% of that capacity in such short time.
I moved "everything" i saw in Preferences to my External SSD (8TB) and the internal SSD was back to around 20% in a couple of seconds.
But then I got warning of dropped frames instead.
What is the best practice for the settings doing 4K/UHD editing in FCP (and simultaneous WAV-editing in Logic Pro perhaps) regarding to cache, library and so on, so I doesn't fill my entire internal drive and not dropping frames?