3 Key Market Metrics
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CryptoQuant consolidates all major crypto exchange data, including prices and volumes, and updates this core data in real-time. Learn 3 essential data from derivative exchanges, which are more sensitive to price changes, and the method to adapt them to your crypto investment strategy.
Understand price volatility by using long/short liquidations
Long/Short liquidations refers to the closing out of long and short positions, or contracts, within exchanges due to changes in the price of the underlying asset. A surge of long liquidations means a material drop in the price of the underlying cryptocurrency, while a surge of short liquidations means the opposite.
Predict investor sentiment by using funding rates
Funding rates refer to the regular payments made to a relatively smaller subset of investors, taking on (contrarian) positions in the form of a long or short positions - by the relatively larger number of investors on the other side. Since there is a higher risk in taking positions against the majority sentiment, larger number position investors are paying smaller number position investors to maintain the positions. If the funding rate is above 0, it means more investors are predicting a bullish crypto market and vice-versa.
Estimate resistance (sell orders in waiting) and support (buy orders in waiting) using open interest
Open interest is defined as the number of open positions, a non-closed deal for long/short, currently on derivative exchanges. An increase in open interest refers to the increase in the crypto market's volatility. Through open interest, crypto investors can speculate on price resistance (many selling orders are in waiting) and support (many buying orders are in waiting) levels.
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