The price of Bitcoin has been experiencing a lot of fluctuations recently, with the bulls currently in control, pushing the price above $61,000 after reclaiming the $60K level. However, weekends tend to have lower trading volume, which can lead to increased volatility in the market. When trading volume is low, it becomes easier to manipulate prices, making it crucial to pay attention to any sudden movements that may occur during the weekend.
Bitcoin’s Funding Rates
One key metric to consider when predicting future price movements is Bitcoin’s funding rates in the derivatives market. These rates indicate whether buyers or sellers are executing their orders aggressively, which can impact spot prices as well. Recently, funding rates plummeted to almost zero following a drop in Bitcoin’s price below $60K, signaling a potential bounce back. With funding rates turning negative on some exchanges, there is a likelihood of a more volatile move in the market in the coming days.
Bitcoin’s Open Interest
Open interest, which reflects the total number of open positions in the derivatives market, is another important metric to monitor during the weekend. High or increasing open interest is often a precursor to increased volatility in the market. In the past 24 hours, there has been a slight uptick in perpetual and futures contracts, indicating the potential for larger price movements. Combined with lower trading volume over the weekend, large open interest could mean that the market is more susceptible to shifts in prices.
These three key factors – market volatility and trading volume, Bitcoin’s funding rates, and open interest – are essential to monitor over the weekend to anticipate any surprises in Bitcoin’s price movements. By staying informed and understanding the impact of these metrics on the market, traders can better position themselves to take advantage of potential opportunities.
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