CryptocurrencyBitcoin Funding Rates Remain Negative But Open Interest Tells...

Bitcoin Funding Rates Remain Negative But Open Interest Tells Another Story

Bitcoin funding rates have been dropping over the last couple of weeks. Even as the price of the digital asset had plummeted, causing some to call it being on ‘discount’, these funding rates have refused to move out of the negative territory. The past week has proven to be no different given that funding rates have exited the neutral territory entirely and remain low.

Funding Rates Refuse To Budge

Coming out of the last week has been a hard one for the crypto market. The bloodbath had sent the majority of the coins in the crypto market into the red and bitcoin had touched the $20,000 level for the first time since December 2020. Through this has come panic across investors and the funding rates have reflected this panic.

Related Reading | Exchange Inflows Ramp Up As Crypto Investors Clamor To Exit Market

The past week had come to a close with funding rates sitting well below neutral. This follows the trend for the 7-day period where the funding rate had trended below neutral each day. It sat at 0.013% as of Tuesday. Not the lowest point so far but it marked the second-lowest point for the month of June.

This decline in funding rates follows what Arcane Research refers to as an orderly sell-off in the derivatives markets. It is no surprise given the liquidation volumes that rocked the market on Monday and Tuesday, touching above $1 billion in a 24-hour period and setting a new daily liquidation event record.

Bitcoin funding rates

Funding rates remain low | Source: Arcane Research

The research and analysis firm also notes that investors are approaching the market with caution. This is due to the “current market structure with increased contagion risks related to Celsius and the pressuring macro backdrop.” This caution comes as no surprise given that investor sentiment now resides in extreme fear, meaning there is no room for careless abandon in a market such as this.

Bitcoin Open Interest Turns The Other Way

Even with the funding rates low, other metrics are surprisingly not doing as bad. One of these is the bitcoin’s open interest in the perpetual markets. This metric remains high even though the price of bitcoin has plummeted close to 2017 highs.

Historically, BTC-denominated open interest has been known to decline in line with the market. This has not been the case with the most recent bitcoin crash. Instead of falling, open interest had hit multiple new all-time highs even as the sell-offs had continued. This suggests that some investors had believed that the bottom was in and tried to take advantage of it. But this was not the case.

Bitcoin open interest

Open interest on the rise | Source: Arcane Research

Nevertheless, open interest in perpetuals was at 298,500 BTC as of Tuesday. It is in stark contrast to the last major market crash that took place back in December, where open interest in perps had declined to 190,000 BTC as the price of the digital asset had fallen.

Related Reading | Bitcoin Crash Sends Institutional Investors Running For The Hills

This increase in open interest suggests that if the bitcoin bottom is not in already, then it may very well be reached soon. Although it is important to keep in mind that a metric like this on its own cannot give a full picture of when the bitcoin bottom will be reached.

Bitcoin price chart from

BTC drops to $21,000 | Source: BTCUSD on
Featured image from Arabian Business, charts from Arcane Reseach and

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Original Source Link


Please enter your comment!
Please enter your name here

Latest News

UK consumer confidence hits record low as household mood darkens

UK consumer confidence has fallen to its lowest level since comparable records began almost 50 years ago as...

Spyware Hunters Are Expanding Their Toolset

The surveillance-for-hire industry's powerful mobile spyware tools have gotten increasing attention lately as tech companies and governments grapple...

BayCare Health System Tops Out $326M South Florida Baptist Hospital

Nonprofit healthcare system BayCare Health System (Tampa, Fla.) celebrated a topping out ceremony for the South Florida Baptist...

False Advertising Claim Over Allegations That “Michael” Included Tracks by Jackson Imitator Can Proceed

From today's unanimous decision of the California Supreme Court in Serova v. Sony Music Entm't, written by Justice...

Future Genius Issue 9: Walk With Dinosaurs in this puzzle-packed special edition now available on Amazon

Dinosaurs are roaming free in a new special edition of Future Genius (opens in new tab) dedicated to...

Everything Renters Need to Know About Move-In Fees

Whether you’re relocating to an apartment in Indianapolis, IN or searching for an apartment in Houston, TX, you...

Must Read

China tourist destination set a GDP target, but Covid locked it down

Sanya, on the southern coast of Hainan, was...

One of the brightest stars in the sky dimmed in 2019. Now we know why.

The star Betelgeuse visibly dimmed in 2019. Now,...
- Advertisement -

You might also likeRELATED
Recommended to you