Recent data indicates that traders have established new Bitcoin positions on the perpetual futures market over the past day, with the Funding Rate suggesting a tendency towards long bets.
Bitcoin Open Interest Sees an Increase
As reported by on-chain analytics firm Glassnode, the prominent rise in Bitcoin to start the week coincided with an increase in Bitcoin perpetual futures Open Interest.
“Open Interest” is a metric that tracks the total number of open BTC perpetual futures positions across all derivatives exchanges.
An uptick in this metric indicates that investors are creating new positions in the market. This trend often comes with a rise in leverage, which can heighten the asset’s volatility.
Conversely, a decline in this indicator suggests that investors are either reducing their risk or facing liquidation. Such trends could lead to a more stable price behavior for the cryptocurrency.
Below is a chart illustrating the Bitcoin Open Interest trend over the past couple of weeks:
The chart above shows that Bitcoin Open Interest rose from 304,000 BTC to 310,000 BTC as the cryptocurrency experienced a recovery spike to $90,000 within the last day.
This marks an increase of about 2%, which may seem modest, yet it indicates that the rally prompted traders to enter new positions on the perpetual futures market.
The Open Interest encompasses both long and short positions, and therefore doesn’t provide insights on whether there’s a bias towards one or the other. Another metric, known as the Funding Rate, is utilized for that purpose.
This metric reflects the periodic fees exchanged among perpetual futures traders. A positive Funding Rate suggests that long investors are paying a premium to shorts, while a negative rate indicates a prevalence of bearish bets.
The chart below demonstrates that the Bitcoin Funding Rate has remained positive for most of the last two weeks, illustrating a bullish sentiment among the majority of perpetual futures traders.
This metric also experienced an increase alongside the rising Open Interest, advancing from 0.04% to 0.09%. “This combination indicates a renewed buildup in leveraged long positions, as perpetual traders prepare for a potential year-end movement,” stated Glassnode.
BTC Price
Bitcoin has experienced a slight pullback since its surge above $90,000, with its price currently at $89,500.
