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Aggregated Funding has Hit ‘Extreme Negative Upset’

BTC

Aggregated funding has been reaching extreme negatives. the last 2 times this meant an ABSOLUTE bottom, but it's important to know how to interpret the data to prevent mistakes in your conclusions.

[1/5]

What is happening here is that presumably people are trying to get their money out of FTX one way or another. This can be done by doing the following:

Long BTC on FTX, while shorting an equal amount on a different exchange at the same price.

[2/5]

When the FTX long get's liquidated, you close the short you had as a hedge on the other exchange. You now essentially have funneled (most) of your money from 1 exchange to another.

But ofc we must do our best to verify that this is happening [3/5]

As seen in the first pic

- CVD is rising extremely hard on FTX, but aggregated CVD is going down. - Funding on FTX is rising equally hard while aggregated funding is going down.

This means that indeed people are turbo buying on FTX and selling other exchanges. [4/5]

BTC is also trading at a whopping 1k!!! premium on FTX because of this.

Just by looking at aggregated funding and concluding that extremely low funding = bottom, you would have most likely made a mistake due to the reason why this spike in negative funding is caused.

[5/5]

This post is based on this twitter thread.

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