3 things to consider with Bitcoin this weekend

Bitcoin price has been on a rollercoaster ride over the past few days, but it seems that at least for now, the bulls have the upper hand.

They managed to reclaim the important technical and psychological mark of $60,000 and are currently attempting to push the BTC price above $61,000.

However, we are heading into the weekend, where price action is usually very different due to various factors, such as lack of volume.

With that in mind, let’s take a look at the three things you need to watch out for over the weekend, as they could impact Bitcoin’s price action.

Trading volume and its impact on volatility

Typically, more volatility is associated with higher trading volume. However, it is also worth noting that trading volume can be a reactionary metric – a function of volatility. In other words, traders react to market changes. When there is a sudden move in one direction or the other, they open the appropriate series of orders to hedge or capitalize on the move, thereby pumping more liquidity into the market.

Trading volume on weekends is traditionally lower than on weekdays. This plays a role in another metric called market depth. The lower the volume, and therefore the liquidity in the market, the easier it is to achieve more significant price movements.

Just a few weeks ago, the BTC price fell from over $62,000 to under $57,000 over the weekend. At the time of writing, the 24-hour volume is around $25 billion, which is more or less average, but any change in this metric over the next few days could be a signal to pay attention.

Hidden signs mean promises

Another interesting metric to consider when assessing the possibility of future price movement is Bitcoin’s funding rates.

These are used to assess whether buyers or sellers are executing their orders more aggressively. It is important to clarify here that funding rates are used in the derivatives market, but the latter are known to influence spot prices as well, making them an important consideration.

Just a few days ago, we reported that funding rates had dropped to almost zero following the Bitcoin price drop below $60,000. This suggested that a recovery could be imminent, and indeed, the cryptocurrency rose above $61,000 just a day later.

At the time of writing, funding rates on some crypto exchanges have even dipped into negative territory, suggesting potentially more volatile developments in the coming days, especially given the increased trading volume.

The Bitcoin price and how it is influenced by open interest

Bitcoin’s open interest is another important indicator that could play a role in forming larger moves during the weekend.

This is another important metric used in the derivatives market. Essentially, it is the sum of all open positions, whether they are long or short. Large or increasing open positions are usually a harbinger of volatility.

Data shows that there has been an increase of about 1.7% in perpetual OI contracts and 0.2% in futures contracts over the past 24 hours.

A large open interest heading into the weekend, coupled with lower trading volume and higher market liquidity, could mean that it would be easier and less effort to move the market.

These are three things to keep in mind over the next few days to avoid surprises and take advantage of potential opportunities.