Perp Traders Remain Quiet As Bitcoin Struggles To Hold $30,000

Best Owie

1 year ago

3 mins read

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.

Bitcoin has been struggling to hold on to the $30,000 level for the better part of this week, failing more often than not. While there have been various reactions from different parts of the market such as the ETFs, perpetual traders seem to have taken this as a sign to hold off on their activities. What this has led to is a continuation of the neutral or below-neutral funding rates that have been recorded in the past couple of weeks.

Bitcoin Funding Rates Unmoved

For the past few months, bitcoin funding rates have been tethering around the neutral and below neutral levels. This has been the case through both market recoveries and downtrends, although there have been periods of slight deviations where funding rates have recovered into the positive but even these have been short-lived.

The last time that the funding rate saw a sharp recovery had been May 12th on the Binance exchange, after which funding rates had once more returned to trending at the neutral and below neutral line. This is interesting given that open interest in perpetual had surged to new all-time highs during this time.

Funding rates fall below neutral | Source: Arcane Research

The 21 bitcoin funding rate intervals on the Binance and Bybit exchanges have been dominated by below-neutral funding rates. A total of 16 funding rates have been neural while 5 have been neutral funding rates. All this while, the perps have continued to trade at a reasonable discount to the spot.

Leverage Still Surging

Even though bitcoin funding rates have been straggling, it has not affected the performance of open interest (OI). OI had declined significantly in the previous week but last week saw BTC denominated open interest retrace its steps and add 41,000 BTC. This brought the total denominated OI to touch new all-time highs of 290,000BTC, beating the previous May 4th high of 282,000 BTC. Just a week after open interest had dived more than 35,000 BTC.

Mostly, the surge in open interest has followed the times when the funding rates have been below neutral. At times where funding rates have been neutral or above neutral, open interest has usually been down.

BTC fails to hold above $30,000 | Source: BTCUSD on TradingView.com

What this suggests is that there will likely be more volatility coming into the market. This could happen regardless of whether the price recovers or continues to decline. However, the growth in open interest usually precedes a large recovery trend such as the one recorded during the July 26th short squeeze. So more than likely, it will be a recovery in price that will follow this surge in volatility.

Bitcoin remains the largest cryptocurrency in the space with a market cap of $552 billion. It is up 5.10% in the last 24 hours to be trading at $29,200 at the time of this writing.

Featured image from CoinDesk, charts from Arcane Research and TradingView.com

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

Best Owie

Best Owie is a seasoned managing editor with a wealth of experience currently serving as the Managing Editor at NewsBTC. Best is a highly skilled professional with a track record of producing engaging and informative content. With a keen eye for detail and a passion for accuracy, Best is committed to ensuring that each article published meets the highest standards of quality.

Best has over six years of experience in the crypto industry and has overseen the creation and publishing of thousands of articles over the years. Best is always abreast of everything that is going on in the crypto industry in order to create and curate the most relevant content for readers. This shines through in Best’s publications, which are always clear and concise, enabling easy reading and understanding for all.

Best is also an avid learner and advocate for new technology. This has seen Best dive into topics in areas such as decentralized finance (DeFi), non-fungible tokens (NFTs), Layer 2 blockchains, etc. In addition to this, Best is a vocal member of the crypto community across various social media platforms such as X and Reddit. Best’s work garners tens of thousands of readers monthly, who rely on the information in these publications to keep up-to-date with everything happening in the crypto community.

Best’s articles explore breaking news, intricate systems such as yield farming, liquidity pools, and other decentralized finance (DeFi) systems. This is because Best understands the importance of information to gaining financial freedom and believes that everyone should have access to this information.

Best also believes in leveraging the blockchain for philanthropy to create the most positive social impact. This involves work with charitable organizations focused on financial literacy and education. With each article, Best lends a voice to important issues such as a more financially inclusive future, transparent systems for growth and development, and technology that is not self-serving but one that serves all of humanity.

When not curating engaging content, Best can be found reading a book with a cup of hot chocolate, enjoying a Netflix series, or exploring the outdoors with Green - the world’s most quiet and well-behaved Husky. Best’s interests also span other industries such as art, finance, and security, attending seminars and conferences in not just the crypto industry but other industries as well.

As an animal lover, Best is also involved with charities for animals, local shelters, and rescues. Best is also involved in local events that promote inclusivity, such as being a prominent member of hiking clubs and a cycling club, as well as being a part of a very happy group of animal lovers.

Best is a true professional in every sense of the word, with an exceptional dedication to producing high-quality work. This shines through in Best's work on and off the clock. These include advocating for inclusive crypto education for all, the impact of financial illiteracy, and the benefits of adopting new technologies such as cryptocurrencies. Best’s prolific career in the media industry is a testament of how hard work and dedication pays.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.