Fresh Bitcoin Long Positions Open Up On Exchanges As Funding Rates Turn Positive
04 Novembre 2022 - 5:00PM
NEWSBTC
On-chain data shows Bitcoin funding rates have turned positive,
suggesting there have been some fresh long openings on derivative
exchanges. Bitcoin Funding Rate Turns Green After Derivative
Exchange Inflows Spike Up As pointed out by an analyst in a
CryptoQuant post, the new long positions can drive the price up in
the short term. There are mainly two Bitcoin indicators of
relevance here, the derivative exchange inflow CDD, and the funding
rates. First, the “derivative exchange inflow CDD” is a metric that
tells us whether old BTC supply is moving into derivative exchange
wallets or not. When the value of this metric spikes up, it means a
large number of previously dormant coins are entering into these
exchanges right now. Related Reading: Bitcoin Puell Multiple
Retests Downtrend Line, Will It Break Above This Time? Since
investors usually deposit their BTC to derivatives for opening up
new positions on the futures market, this kind of trend can lead to
higher volatility in the price of the crypto as a result of the
increased leverage. Now, here is a chart that shows the trend in
the 7-day moving average Bitcoin derivative exchange inflow CDD
over the past few days: Looks like the 7-day MA value of the metric
has spiked up recently | Source: CryptoQuant As you can see in the
above graph, the Bitcoin derivative exchange inflow CDD has spiked
up over the past day, suggesting that some aged BTC supply has just
been deposited into these platforms. Dormant supply usually belongs
to the most resolute holders in the market, so any movement from
them can have noticeable impacts on the crypto. Related Reading:
Stablecoin Exchange Inflow Mean Hits ATH, Why This Could Be Bullish
For Bitcoin The other metric of interest here is the “funding
rate,” which measures the periodic fee being exchanged between
traders on the futures market. When this indicator has positive
values, it means there are more long positions open than shorts
right now. On the other hand, negative values imply shorts are
overwhelming the longs at the moment. The below chart shows the
recent trend in the Bitcoin funding rates. The value of the metric
has turned positive over the past day | Source: CryptoQuant From
the chart, it’s apparent that following the latest inflows, the
funding rates have turned turned back to positive after being
slightly negative yesterday. This would suggest that the HODLers
who transferred these coins have opened new long positions in the
futures market. The quant notes in the post that these fresh long
positions could support Bitcoin in the short term. BTC Price At the
time of writing, Bitcoin’s price floats around $20.5k, up 2% in the
last week. Looks like BTC has surged up a bit in the past day |
Source: BTCUSD on TradingView Featured image from Bastian Riccardi
on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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