Perp Traders Remain Quiet As Bitcoin Fights To Retain Its $30,000 Level
For the most part of this week, Bitcoin has been trying to stay over $30,000, failing more often than not. While other areas of the market, such as ETFs, have had varying reactions, perpetual traders appear to have seen this as a cue to hold off on their operations. As a result, the neutral or below-neutral financing rates that have been seen in recent weeks have been maintained.
Bitcoin funding rates have been hovering about the neutral and below neutral levels for the past few months. This has been true during both market recoveries and downtrends, while there have been brief periods of modest departures in which financing rates have rebounded to positive levels. On the Binance exchange, the last time the funding rate witnessed a big rebound was on May 12th, following which funding rates have reverted to trending at the neutral and below neutral line. This is noteworthy since open interest in perpetual had soared to fresh all-time highs at the time.
Despite the fact that bitcoin funding rates have been fluctuating, open interest has performed well (OI). OI had dropped dramatically the week before, but BTC denominated open interest retraced its steps last week, adding 41,000 BTC. This pushed the total denominated OI to new all-time highs of 290,000 BTC, surpassing the previous high of 282,000 BTC set on May 4th.
After only a week, open interest had plummeted to almost 35,000 BTC. This indicates that the market will likely see increased volatility. Regardless matter whether the price rebounds or continues to fall, this might happen. However, a big recovery trend, such as the one seen during the July 26th short squeeze, frequently accompanies an increase in open interest. As a result, this rise in volatility will almost certainly be followed by a price rebound. With a market capitalization of $552 billion, Bitcoin is the most valuable cryptocurrency. It has gained 5.10 percent in the last 24 hours and is currently trading at $29,200.