Bitcoin continues to trade sideways during today’s trading session, holding the line draw for the past few weeks. Recent data shows that the cryptocurrency has been recording “crab-like” price action in the short term, but operators favor the long side of their trades.

As of this writing, Bitcoin trades at $29,700 with a 0.7% loss in the last 24 hours and a 2% loss in the previous week. The cryptocurrency’s implied volatility has been trending to the downside while BTC’s price holds still at its current levels.

Data from a report posted by crypto analytics firm Block Scholes via Deribit indicates that Bitcoin and Ethereum traders have been seeking long exposure to these cryptocurrencies. As mentioned above, this behavior coincides with a decline in delivered volatility.

As a result, the BTC and ETH perpetual swap markets are experiencing a shift in funding rates. This measure determines the percentage paid by long to short positions at a given time.

The chart below shows that funding rates have been trending to the upside since last September 2022. At that time, the price of Bitcoin and other cryptocurrencies hit a multi-year low.

Now, the BTC price experienced a 100% recovery from those levels leading to a change in the derivatives sector. The chart shows that funding rates across the BTC, ETH, and USDC trading pairs have been positive for the past three months.

This data shows that traders are going long and willing to pay short positions for their exposure. A positive funding rate is often linked to the sentiment among operators and could hint at an upcoming bullish run when found on platforms like Deribit, where “smart money” trades.

Conversely, Block Scholes wonders: why are traders going long when implied volatility fell to new all-time lows? What’s driving operators for long exposure while the price trades sideways so much that they are willing to pay a premium? The report stated:

We find it somewhat odd that traders are willing to pay such a consistently high rate for long exposure despite such low expectations of volatility.

The above is unclear; it could be traders hedging their positions on the options market could be traders getting ready for an upcoming move as the U.S. Securities and Exchange Commission (SEC) deliberates on the potential approval of a spot Bitcoin Exchange Traded Fund (ETF).

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