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.
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.
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.