3 Things to Watch Out for This Weekend That May Impact Bitcoin's Price Performance

Bitcoin's price has been on a rollercoaster throughout the past few days but it appears that, at least for now, the bulls have the upper hand.

Bitcoin’s price has been highly volatile in recent days, but it seems that the bulls are largely in control, at least for now.

They managed to reclaim the key technical and psychological level of $60K and are now attempting to drive BTC towards $61,000.

However, we’re also approaching the weekend, when price action tends to be different due to several factors, such as lower volume.

In light of this, let’s take a look at three things to watch over the weekend that could influence Bitcoin’s price performance.

Trading Volume and How It Impacts Volatility

Usually, higher trading volume is associated with more volatility. However, it’s also important to note that trading volume can be a lagging metric – a function of volatility. In other words, traders react to price movements. If there’s a sudden move in either direction, traders open the respective batch of orders to protect or capitalize on the move, thus injecting more liquidity into the market.

Trading volume on weekends is usually lower than that during the weekdays. This contributes to another metric called market depth. The lower the volume and, thus, the liquidity in the market, the less effort is needed to create more substantial price movements.

Just a couple of weeks ago, the BTC price slid from over $62,000 to below $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 changes in this metric over the next couple of days could be something to watch out for.

Hidden Signs Spell Promise

Another curious metric to consider when gauging the potential for future price movements is Bitcoin’s funding rates.

These rates are used to gauge whether buyers or sellers are executing their orders more aggressively. It’s important to clarify here that funding rates are used in the derivatives market. However, the latter is known to also impact spot prices, thus making this an important consideration.

Just a few days ago, we reported that funding rates had declined to almost zero following Bitcoin’s price drop below $60K. This suggested that a bounce might be coming and, sure enough, just a day later, the cryptocurrency soared past $61,000.

At the time of writing, funding rates on some crypto exchanges have even turned negative, indicating the potential for a more substantial move in either direction in the coming days, especially considering the increased trading volumes.

Bitcoin’s Price and How It’s Impacted by Open Interest

Another key metric that could contribute to larger moves over the weekend is Bitcoin’s open interest.

This is another important metric used in the derivatives market. It’s essentially the sum of all open positions, regardless of whether they are long or short. Large or increasing open interest is usually an early sign of volatility.

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

Large open interest heading into the weekend, coupled with the lower trading volume and market liquidity, could mean that less effort is required to shift the market.

These are three things that could be monitored over the next couple of days to avoid any surprises and potentially capitalize on any opportunities.

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