A recent update has introduced significant enhancements for traders analyzing the cryptocurrency market. New indicators for crypto futures and perpetual swaps are now available, sourced from popular exchanges such as Bybit, Binance, and OKX, thereby expanding the analytical capabilities within the platform.
One crucial addition is the funding rate indicator, which represents a periodic cash flow meant to help align perpetual futures prices with the actual spot price of the underlying asset. While the calculation of this rate can differ among exchanges, the general formula takes into account two main components: the interest rate, which reflects a fixed cost of capital set by the exchange, and the premium index, highlighting the disparity between the perpetual futures price and the spot price.
The funding rate can either be positive or negative. When perpetual contracts trade above the spot price, long traders pay shorts, resulting in a positive funding rate. Conversely, a negative funding rate occurs when perpetual contracts are priced below the spot market, meaning that shorts are compensating longs.
In addition to funding rates, the update also introduces a liquidation indicator. Liquidations occur when a leveraged trader’s position is automatically closed due to insufficient margin. Although these may appear as standard trades in the order book, they are actually enforced executions triggered by the system. This indicator allows traders to monitor liquidation volumes—color-coded for clarity. Green highlights buy-side liquidations, indicating that the exchange has closed short positions and repurchased assets, while red signifies sell-side liquidations, where long positions are closed, and assets are sold.
Another metric introduced is the long/short ratio, which gauges trader sentiment by displaying how many accounts are holding long positions versus short positions. This ratio only considers the directional positions of accounts, ignoring the size and volume of trades. It is calculated as the number of long accounts divided by the number of short accounts, allowing traders to assess overall market expectations regarding price movements.
Moreover, the long/short accounts percentage metric provides insights into market sentiment by showing the proportion of traders with long or short positions. Long accounts are represented in green, indicating traders anticipating price increases, while short accounts are displayed in red, indicating an expectation of price declines. Collectively, these two metrics will always total to 100%.
The update also includes the crypto open interest indicator, which represents the total number of outstanding futures contracts at any given moment. This figure may vary based on the exchange and the financial instrument and can be displayed in either the number of contracts or converted into the base/quote currency. Open interest reflects the total volume of open positions and serves as a significant metric for evaluating market liquidity when paired with trading volume.
Traders can easily access these new indicators through the Indicators menu. By selecting the Financials tab, they can incorporate these instruments into their analysis, helping them to make more informed trading decisions.
This enhancement of features is anticipated to further facilitate traders in the crypto market, providing them with useful tools to better navigate financial dynamics in this continually evolving environment.