After the on chain data of Bitcoin showed signs of overheating in the futures trading market, the price of Bitcoin has dropped below $30000.

Bitcoin's equity financing ratio significantly increased yesterday

In the past week, Bitcoin has maintained a good level of around $30000, but the digital currency has already fallen below this level today.

As mentioned by an investment analyst at CryptoQuant in a post, there were significant signs of a decline yesterday. More specifically, the two futures trading market indicators, published interest rates and equity financing rates, are likely to indicate an early decline in asset value.

The "open position contract" is an indicator that tests the total number of Bitcoin stock index futures contracts publicly released on the derivatives exchange today. This indicator applies to both long and short trading positions.

When the value of an indicator increases, it means that investors are currently opening a new contract in the market. With the widespread increase in leverage ratio in this industry and the opening of more trading positions, this trend may cause the prices of digital currencies to become increasingly fluctuating.

On the other hand, indicators indicating a decline indicate that the holder has closed their position or been liquidated by the service platform. Of course, this development trend may lead to prices becoming increasingly stable.

Now, here is a data chart that shows the trend of Bitcoin open interest rates in the previous month's 30 day moving average system (MA):

As shown in the figure, about a week ago, with the price of Bitcoin jumping above $30000, the open interest rate of Bitcoin rose to a very high level. But not long ago, with the price exceeding $31000, the indicator showed some decrease, and then fell below $31000 again.

However, it can be clearly seen from the data chart that although the new height of the indicator, which has been reduced, is much lower than what was seen earlier, it is still much higher than the value before the significant surge.

This still significant level persisted until yesterday, indicating that the Bitcoin futures trading market is likely to still have a lot of financial leverage. Given this, it is reasonable for coins to experience some fluctuations today.

Another relevant indicator here is the "equity financing interest rate", which warns us of the timely cost of intermediate exchange among trader in the futures trading market.

When an indicator is coincidental, it means that both sides are currently bearish, therefore, the current upward mentality in the market is more core. Similarly, negative numbers mean that most people have negative attitudes. The figure below shows yesterday's indicators.

From the graph, it can be seen that Bitcoin's equity financing ratio had a very stable value yesterday, indicating that long positions exceeded short positions. From a historical perspective, when the green value of such indicators is accompanied by high open interest rates, there is a high possibility of long-term compression in the sales market.

Squeeze forming "is a large-scale liquidation process that cascades together like a waterfall. According to CoinGlass, there have been significant liquidations in the past day, as asset interest rates have long predicted, with most liquidation contracts being long-term contracts.

BTC Price

At the time of writing, the transaction price of Bitcoin was approximately $29900, which increased by 5% last week.