Bitcoin Perps Heat Up Again As Leveraged Longs Rise

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Data shows traders have set up fresh Bitcoin positions on the perpetual futures market during the past day, and the Funding Rate suggests they are long bets. Bitcoin Open Interest Has Witnessed An Uptick According to data from on-chain analytics firm Glassnode , the surge Bitcoin has seen to kick off Monday has come alongside a spike in the Bitcoin perpetual futures Open Interest. Related Reading Bitcoin Inflow Slowdown: CryptoQuant Founder Says Sentiment Could Take Months To Recover 6 hours ago The “ Open Interest ” refers to an indicator that keeps track of the total amount of BTC perpetual futures positions that are currently open on all derivatives exchanges. When the value of this metric rises, it means the investors are opening up fresh positions on the market. Since such a trend usually accompanies an increase in leverage for the sector, it can lead to more volatility for the asset. On the other hand, the indicator going down implies investors are either pulling back on risk or getting liquidated by their platform. This kind of trend can result in the cryptocurrency’s price behaving in a more stable manner. Now, here is a chart that shows the trend in the Bitcoin Open Interest over the last couple of weeks: The value of the metric seems to have gone up | Source: Glassnode on X As displayed in the above graph, the Bitcoin Open Interest rose from 304,000 BTC to 310,000 BTC as the cryptocurrency observed a recovery surge to $90,000 during the past day. This represents an increase of about 2%, which isn’t much, but still signals that the rally encouraged traders to open up new positions on the perpetual futures market. The Open Interest includes both types of positions when calculating its value, so it contains no information about whether positions have a bias toward shorts or longs. Another metric called the Funding Rate can be used to determine that instead. This indicator measures the amount of periodic fee that perpetual futures traders are exchanging between each other. A positive value implies long investors are paying a premium to the shorts in order to hold onto their positions, while a negative one implies bearish bets are dominant. Related Reading Ethereum Exchange Outflows Soar To $978M: Sign Of Dip Buying? 3 days ago As the below chart shows, the Bitcoin Funding Rate has been positive for much of the last two weeks, indicating that a bullish sentiment has been shared by the majority of perpetual futures traders. Looks like the value of the indicator has been positive for a while now | Source: Glassnode on X This metric also noted an uptick alongside the increase in the Open Interest, going from 0.04% to 0.09%. “This combination signals a renewed buildup in leveraged long positioning, as perpetual traders position for a potential year-end move,” noted Glassnode. BTC Price Bitcoin has seen a bit of a pullback since its surge above $90,000 as its price is now back at $89,500. The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView Featured image from Dall-E, Glassnode.com, chart from TradingView.com