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Bitcoin Perpetual Contract Capital Rate and Short Liquidation Volume

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It is reported that the capital rate of Bitcoin perpetual contract will turn negative for the third time in 2023. Each time the capital interest rate becomes n…

Bitcoin Perpetual Contract Capital Rate and Short Liquidation Volume

It is reported that the capital rate of Bitcoin perpetual contract will turn negative for the third time in 2023. Each time the capital interest rate becomes negative, the short liquidation volume will increase as the BTC price rises. In January and February, when the capital rate in January is negative, the duration is slightly longer than that in February.

In 2023, the capital rate of Bitcoin perpetual contract will be negative for the third time

Interpret the above information:


The message states that the capital rate of Bitcoin perpetual contract will turn negative for the third time in 2023. The negative capital rate is a situation where the funding rate is higher for short positions than for long positions. This creates an imbalance in the market where traders holding short positions are required to pay a fee to those holding long positions. As a result, the short liquidation volume increases as the BTC price rises. This can be very significant because the short liquidation volume can cause a cascade of forced positions to be liquidated in a market downturn, leading to a sharp drop in Bitcoin price.

The fact that the capital rate of Bitcoin perpetual contract will turn negative for the third time in 2023 suggests that the market will experience a major market downturn. This is because the negative capital rate usually indicates an oversaturation of short positions in the market. The message also indicates that the duration of the negative capital rate in January is slightly longer than that in February. This may suggest that the market will experience a peak in January before gradually recovering in February.

The short liquidation volume is a metric used to measure the amount of liquidation that occurs in the market due to forced position closures. This metric is highly relevant to the cryptocurrency market because it is highly volatile and can experience sudden price swings. The short liquidation volume is a key indicator of market sentiment and can be used to predict market movements.

In conclusion, the capital rate of Bitcoin perpetual contract turning negative for the third time in 2023 can have a significant impact on the cryptocurrency market. Traders holding short positions should be cautious as the short liquidation volume can cause a cascade of forced position closures in the event of a market downturn. The market is expected to peak in January before gradually recovering in February. The short liquidation volume is a key metric in predicting market sentiment and movements.

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