Yesterday at 19:00, the open interest of BCHUSDT perpetual futures was 281,236 BCH; today at 20:00 it was 489,280. In 25 hours, an additional 74% of the positions were still open.
In the same day, its funding rate never moved even once: on September 23, three settlements were all 0.01%—exactly the benchmark value left for 8-hour contracts when the premium is near zero. Taken by the common reading of “a low funding rate means leverage hasn’t come in,” those new positions adding up to 74% shouldn’t exist.
Those two numbers didn’t “fight”; they aren’t measuring the same thing. The funding rate is anchored to the price gap between the perpetual and the index. At 20:25 on September 23 Beijing time—the moment I read—it was trading with a mark price of 344.03 and an index of 343.88, very close together, so the funding rate naturally sits on the benchmark. It answers: “By how much is the perpetual more expensive than spot?” Open interest answers a different question: “How many positions are still open?” When the price gap is close to zero and open interest is huge, they can both be true at the same time—and today’s BCH is just that.
The commotion is definitely on the derivatives side as well: in the trailing 24 hours up to 20:25, this perpetual traded $1.312 billion, while the spot pair BCHUSDT had only $160 million—8.2 times less. Shift the trailing window by one hour and the numbers change; this is the reading at that moment.
There’s another easy-to-mix-up metric. The USD notional value of these positions rose from $75.85 million to $170 million—more than doubled—but the conversion prices at the two time points weren’t the same. If you back-calculate using the notional value and the number of contracts provided by the interface, they are $269.70 and $347.48 respectively—nearly a 30% difference. Contract counts and market value are two different measures; the latter is pushed around by price, so the “74%” and “more than 1x” aren’t talking about the same thing.
If you want to know whether leverage has actually entered, the funding rate isn’t the right indicator—the metric to look at is open interest. As for whether those new 74% positions are net long or net short, and which direction it will go next, those two numbers don’t answer, and I won’t interpret them for you.
$BCH #perpetual futures
In the same day, its funding rate never moved even once: on September 23, three settlements were all 0.01%—exactly the benchmark value left for 8-hour contracts when the premium is near zero. Taken by the common reading of “a low funding rate means leverage hasn’t come in,” those new positions adding up to 74% shouldn’t exist.
Those two numbers didn’t “fight”; they aren’t measuring the same thing. The funding rate is anchored to the price gap between the perpetual and the index. At 20:25 on September 23 Beijing time—the moment I read—it was trading with a mark price of 344.03 and an index of 343.88, very close together, so the funding rate naturally sits on the benchmark. It answers: “By how much is the perpetual more expensive than spot?” Open interest answers a different question: “How many positions are still open?” When the price gap is close to zero and open interest is huge, they can both be true at the same time—and today’s BCH is just that.
The commotion is definitely on the derivatives side as well: in the trailing 24 hours up to 20:25, this perpetual traded $1.312 billion, while the spot pair BCHUSDT had only $160 million—8.2 times less. Shift the trailing window by one hour and the numbers change; this is the reading at that moment.
There’s another easy-to-mix-up metric. The USD notional value of these positions rose from $75.85 million to $170 million—more than doubled—but the conversion prices at the two time points weren’t the same. If you back-calculate using the notional value and the number of contracts provided by the interface, they are $269.70 and $347.48 respectively—nearly a 30% difference. Contract counts and market value are two different measures; the latter is pushed around by price, so the “74%” and “more than 1x” aren’t talking about the same thing.
If you want to know whether leverage has actually entered, the funding rate isn’t the right indicator—the metric to look at is open interest. As for whether those new 74% positions are net long or net short, and which direction it will go next, those two numbers don’t answer, and I won’t interpret them for you.
$BCH #perpetual futures