Analysing Perpetual swaps funding rates can aid investors to  trade profitably

Analysing Perpetual swaps funding rates can aid investors to trade profitably

By Greenchic | Investing and Trading | 1 May 2021


crypto, cryptocurrency, price, trading, finance

 Another valuable strategy that crypto investors can use to trade profitably


Last week, these crypto cats - Garu, Mochu and Meow explained how one can trade cryptocurrencies profitably by employing basic technical analysis techniques.

cats, pets, lifeHowdy crypto people, we are dropping by to say hi to you devoted crypto readers

Now since they don’t feel inspired to continue the session further, I myself will talk about this new strategy that crypto investors can employ when engaging in crypto trading.

cat, pet, nature, photographyCat Meow is busy outside and unavailable to be part of this crypto article, she too conveyed her hellos to you dear readers

Spotting Market Tops and Dips by looking at Perpetual swaps funding rates

 

crypto price, ta, investing, trading
According to eminent Technical Analyst, Alex Kruger, one can spot Market Tops and dips by checking out the perpetual swaps funding rates. When funding rates here are 0.1% and above every 8 hours, it means investors are over excited so the time for a deep correction would be coming soon .

At this time Alex, recommends investors to book partial profits and not buy more cryptos this time, as a market top may be in place.

Similarly, in the opposite scenario where perpetual swaps funding rates are low at 0.01% and below every 8 hours, it could signify a dip, which is a good time for investors to buy up cryptos that are low in price and available at a discount.

This strategy should be used in conjunction with fundamental trading analysis that my crypto cats have explained in an article that you can check out here.

technical analysis, ta, crypto, trading, investing

This is how the perpetual swap funding rates work

Positive perpetual swap funding rates, show that investors are bullish, here long traders pay funding to short traders. Conversely, when perpetual swap funding rates are negative, investors feel bearish and here short traders pay funding to long traders.

Perpetual swap funding rate details can be checked in ViewBase website here - https://www.viewbase.com/funding


More indepth explanation on this strategy can be read at this article - https://cryptobriefing.com/crypto-trading-strategy-how-use-funding-rates-buy-dip/

Disclaimer -: None of my articles are investment advise as me and my crypto cats are not investment experts. We share our knowledge on crypto as we learn it through our research and understanding. So do your own research before investing.

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Greenchic
Greenchic

I love to write on things I am passionate about - environment, citizens activism, crypto and life in general. I am a cat enthusiast, nature lover. I am excited to engage at the Publish0x platform by reading and writing crypto and other content here.


Investing and Trading
Investing and Trading

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