A recent update has been introduced to enhance the analysis of cryptocurrency markets. This update includes the integration of indicators specifically designed for crypto futures and perpetual swaps through notable exchanges like Bybit, Binance, and OKX.
One of the key features is the funding rate, which is a periodic cash flow mechanism that aligns the price of perpetual futures with the underlying asset’s spot price. The funding rate calculation involves two components: the interest rate, a fixed cost of capital set by the exchange, and the premium index, which reflects the difference between the perpetual futures price and the spot price. Depending on market conditions, the funding rate can be positive or negative. Positive funding occurs when perpetual futures trade above the spot price, resulting in longs paying shorts. Conversely, negative funding happens when perpetuals trade below the spot price, where shorts pay longs.
Liquidations are another crucial aspect of this update. A liquidation takes place when a leveraged position is automatically closed because the trader’s margin falls below the necessary maintenance level. Although liquidations may appear as normal trades in the order book, they are, in reality, forced executions triggered by the system. The update allows users to track liquidation volumes, distinguishing between buy-side liquidations—where short positions are closed and assets are bought back—and sell-side liquidations—where long positions are closed and assets are sold.
Further insights are offered through the long/short ratio of accounts, which provides a snapshot of trader sentiment by indicating the number of accounts holding long versus short positions on a specific asset. This metric does not consider the volume or number of trades; it counts each account as either one long or one short position, thereby indicating overall market expectations regarding asset price movements.
Another metric introduced is the long short accounts percentage, which reveals what share of traders are opening long or short positions. The long accounts percentage indicates how many traders are expecting price increases, while the short accounts percentage reflects the proportion of traders anticipating price decreases. Together, these two metrics contribute to a comprehensive view of the trading landscape, adding up to a total of 100%.
Additionally, the update features a focus on crypto open interest, which refers to the total number of outstanding futures contracts at any given moment. This can be displayed either as the number of contracts or in base/quote currency, yet it consistently represents the same aspect—the total volume of open positions. Changes in open interest throughout the day, combined with trading volume, can act as a gauge of market liquidity, empowering traders to make better-informed decisions.
Traders can access all these new indicators within the typical Indicators menu by selecting the Financials tab, where the newly added options are available for use. This development marks a significant advancement for those engaged in crypto trading, providing valuable tools to better navigate the complexities of the market and enhance trading strategies.