Bitcoin Derivative Market Bulls Have Vanished

The bitcoin perpetual swap, the most liquid and traded futures instrument, is a contract that allows traders to speculate on the bitcoin price with leverage. While there is always an equal amount of long and shorts, the positioning of those contracts relative to the spot bitcoin price shows the bullish/bearish bias in the derivatives market.

When the contract price of a perpetual futures contract (a futures contract that never expires) is above the spot market bitcoin price, the perpetual futures funding rate will be positive, meaning longs pay shorts a percentage of their notional position size. The opposite is also true.

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