The number of Bitcoin traders who think a new rally will start is increasing, which means they plan on taking more leverage, but also more risks, in crypto derivatives markets.
For a couple of days now, the cost to fund a long position in the market for Bitcoin is swapping continuously. Arcane Research points out that this type of derivatives in crypto markets is not unlike the futures contracts in traditional markets, and that it has managed to break above the neutral level for the first time since two weeks ago.
The average cost is now getting closer to 0.08%, but that is still below the level of almost 0.12%, which was registered in mid-March when Bitcoin reached its new ATH.
Nevertheless, this increase indicates that traders are discovering an appetite for taking risks after the market shakeout of the recent couple of weeks.
The Arcane report mentions that: “The funding rate spikes coincide with strong optimism and high leverage from short-term traders. The funding rates have once again started to move upwards after two weeks in the neutral territory. After the initial breakouts from the neutral territory, bitcoin began moving upwards towards new price highs, but not without volatility.”