How to trade altcoin perpetual contracts on Bybit?

Understanding Altcoin Perpetual Contracts on Bybit

Altcoin perpetual contracts are derivative financial instruments that allow traders to speculate on the price movement of cryptocurrencies such as ETH, SOL, ADA, DOT, and others without owning the underlying asset. Unlike traditional futures, perpetual contracts have no expiration date, enabling traders to hold positions indefinitely. Bybit, a leading cryptocurrency derivatives exchange, offers altcoin perpetual contracts with high leverage, deep liquidity, and advanced trading tools. These contracts are settled and margined in USDT, making them stablecoin-based and easier to manage for traders avoiding volatility from other crypto assets.

Each altcoin perpetual contract on Bybit represents a specific quantity of the underlying cryptocurrency. For example, the ETH/USDT perpetual contract allows traders to go long (buy) if they expect the price of Ethereum to rise, or short (sell) if they anticipate a decline. The contract value is calculated based on the mark price, which helps prevent price manipulation and ensures fair liquidation processes. Traders must understand key concepts such as leverage, margin, funding rate, and liquidation price before initiating any trade.

Setting Up a Bybit Account and Funding Your Wallet

Before trading altcoin perpetual contracts, users must create and verify a Bybit account. Visit the official Bybit website and click on “Sign Up.” Enter a valid email address and create a strong password. Complete the KYC (Know Your Customer) verification if required for higher withdrawal limits or access to certain features. Once logged in, navigate to the Assets section and deposit USDT into your Unified Trading Account (UTA) or Contract Wallet, depending on your account type.

To deposit USDT:

• Click on “Deposit” under the Assets tab
• Select USDT and choose the preferred network (e.g., TRC20, ERC20, BEP20)
• Copy the deposit address provided by Bybit
• Transfer USDT from your external wallet or exchange

Ensure the network matches your sending platform to avoid loss of funds. After confirmation, the deposited USDT will be available for use in the Derivatives wallet. This balance serves as margin for opening and maintaining perpetual contract positions.

Navigating the Bybit Trading Interface for Altcoins

Access the perpetual contracts section by selecting “Derivatives” from the top menu, then choose “USDT Perpetual.” The interface displays a list of available altcoin contracts, including BTC/USDT, ETH/USDT, SOL/USDT, ADA/USDT, and more. Click on the desired altcoin pair to open the trading panel. The interface includes a price chart, order book, recent trades, and an order entry section.

Key components:

• Chart area: Displays price movement with customizable indicators and timeframes
• Order book: Shows real-time buy and sell orders at various price levels
• Market depth: Visualizes order concentration and potential support/resistance zones
• Order entry panel: Allows setting order type, price, quantity, and leverage

To trade, select the altcoin contract, adjust the leverage using the slider (e.g., 10x, 20x, up to 100x depending on the coin), and decide between Cross Margin or Isolated Margin mode. Cross Margin uses the entire wallet balance as collateral, reducing liquidation risk but increasing exposure. Isolated Margin allocates a fixed amount, limiting both risk and profit potential.

Placing and Managing Altcoin Perpetual Orders

To open a position:

• Choose Buy (Long) or Sell (Short) in the order panel
• Select order type: Limit, Market, or Conditional (Stop-Market, Take-Profit)
• Enter the desired quantity in USDT or number of contracts
• Confirm the order

For a Limit Order, specify the price at which you want to enter. The trade executes only when the market reaches that price. A Market Order fills immediately at the best available price, ideal for quick entries but subject to slippage during high volatility.

After opening a position, monitor the Position tab at the bottom. It displays:

• Entry price
• Mark price
• Unrealized PnL (Profit and Loss)
• Liquidation price
• Maintenance margin

Set Take-Profit and Stop-Loss orders to automate exits:

• Click “+TP/SL” next to the position
• Enter trigger price for Stop-Loss to limit losses
• Enter target price for Take-Profit to secure gains
• Choose between Last Price, Mark Price, or Index Price as trigger source

These orders help manage risk without constant monitoring.

Monitoring Funding Rates and Avoiding Liquidation

Perpetual contracts on Bybit include a funding rate mechanism that aligns the contract price with the spot market. Funding is exchanged between long and short positions every 8 hours. If the funding rate is positive, longs pay shorts; if negative, shorts pay longs. Check the current funding rate displayed on the contract page. High positive rates suggest bullish sentiment but increase holding costs for long positions.

To avoid liquidation:

• Maintain sufficient available balance in your margin
• Monitor the liquidation price shown in your position
• Avoid over-leveraging, especially with volatile altcoins
• Use Isolated Margin to cap risk per trade

If the mark price approaches your liquidation level, consider adding additional margin manually. Click “Add Margin” in the position panel and transfer funds from your wallet to increase collateral.

Withdrawing Profits and Closing Positions

To close a position:

• Navigate to the Position tab
• Click “Close” or enter an opposite order of equal size
• Confirm the action

The realized PnL will be credited to your Derivatives wallet. To withdraw profits:

• Go to Assets > Withdraw
• Select USDT
• Enter amount and destination address
• Complete security verification (e.g., 2FA, email confirmation)

Ensure the network matches your receiving wallet. Withdrawal processing times vary by blockchain congestion.

Frequently Asked Questions

What is the minimum trade size for altcoin perpetual contracts on Bybit?The minimum trade size varies by coin. For example, ETH/USDT requires a minimum of 10 USDT worth of contracts. Check the specific contract’s info page under “Specifications” for exact values.

How does Bybit calculate unrealized PnL for altcoin contracts?Unrealized PnL is calculated as:(Mark Price – Entry Price) × Position Size for longs(Entry Price – Mark Price) × Position Size for shortsThis value updates in real time based on current market conditions.

Can I change leverage after opening a position?Yes. In the Position tab, click “Leverage” to adjust. Increasing leverage lowers the liquidation price for longs (or raises it for shorts), increasing risk. Decreasing leverage has the opposite effect.

What happens during forced liquidation?If the mark price reaches your liquidation price, Bybit automatically closes the position. A liquidation fee is charged, and remaining funds (if any) are returned to your wallet. Insurance funds cover extreme cases to prevent negative balances.