An Update on Crypto Market Structure: Leverage and Volatility
AUG 16, 2021 • 4 Min Read
Disclosure: Delphi Ventures and members of our team have invested in BTC, ETH, SOL, YGG & LUNA. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.
Key Takeaways
Another sign the market isn’t being propped up by leverage comes from funding data. When funding is positive, it means the perp is trading higher than the spot index for said asset. When funding is negative, the perp is trading at a discount to the spot index. Positive funding implies more buyers than sellers, and negative funding implies the opposite.
In Apr. and May. 2021, we saw funding rates hit insane levels — as high as 0.10% per 8 hours for sustained periods of time. BTC and ETH price were moving vertically; everyone and their mother wanted more exposure to crypto. We all know what happened next. Leveraged buyers tapped out and the market cascaded downwards, fueled by heavy liquidations.
Funding data for the last month paints a bullish picture, as it shows us during this entire rally, funding never really hit exuberant levels. In fact, the funding trend just marginally flipped positive in recent days.
Simply put, current funding data shows us traders have been in no rush to get long BTC, and that frothy conditions are still a way off.
Metus vulputate eu scelerisque felis. Nulla facilisi cras fermentum odio eu. Scelerisque fermentum dui
faucibus in ornare quam viverra orci sagittis. A iaculis at erat pellentesque adipiscing commodo elit. In
fermentum et sollicitudin ac orci. Ultrices sagittis orci a scelerisque purus. Faucibus ornare
suspendisse sed nisi lacus sed viverra tellus in. Mauris cursus mattis molestie a iaculis at erat
pellentesque adipiscing. Volutpat diam ut venenatis tellus in metus vulputate. Eu consequat ac felis
donec et odio pellentesque. Eu mi bibendum neque egestas congue quisque egestas diam. Quam
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Iaculis nunc sed augue lacus viverra vitae congue eu consequat. Gravida neque convallis a cras.
Nunc scelerisque viverra mauris in aliquam sem. Non odio euismod lacinia at quis risus sed vulputate
odio. Purus faucibus ornare suspendisse sed. Turpis egestas maecenas pharetra convallis posuere
morbi. Nec feugiat nisl pretium fusce id velit ut. Nunc congue nisi vitae suscipit tellus mauris a diam.
Posuere sollicitudin aliquam ultrices sagittis orci. Urna nec tincidunt praesent semper. Turpis nunc
eget lorem dolor sed viverra.
suspendisse sed nisi lacus sed viverra tellus in. Mauris cursus mattis molestie a iaculis at erat
pellentesque adipiscing. Volutpat diam ut venenatis tellus in metus vulputate. Eu consequat ac felis
donec et odio pellentesque. Eu mi bibendum neque egestas congue quisque egestas diam. Quam
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Iaculis nunc sed augue lacus viverra vitae congue eu consequat. Gravida neque convallis a cras.
Nunc scelerisque viverra mauris in aliquam sem. Non odio euismod lacinia at quis risus sed vulputate
odio. Purus faucibus ornare suspendisse sed. Turpis egestas maecenas pharetra convallis posuere
morbi. Nec feugiat nisl pretium fusce id velit ut. Nunc congue nisi vitae suscipit tellus mauris a diam.
Posuere sollicitudin aliquam ultrices sagittis orci. Urna nec tincidunt praesent semper. Turpis nunc
eget lorem dolor sed viverra.
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Readers also enjoyed
Delphi Daily
Chart of The Day: StepN Runs! StepN is a web3 lifestyle application that allows users to earn GST or GMT […]
Delphi Daily
Market Update After a strong showing this week, BTC spent most of today chopping around between $47K and $48.5K. DeFi […]
Delphi Daily
Shorts on Bitfinex are back at it, Axie leads dApp revenue, ENS registrations hit all-time high, and OlympusDAO's ascent.
Delphi Daily
Long-dated U.S. Treasury Yields Hit 2-Year High The yield on 10-year U.S. Treasury notes jumped to a 2-year high as […]