Bitcoin Sees 4th Dip in Funding Rates This Year What Does This Mean For BTC?

Bitcoins recovery continues to show momentum, with the asset currently trading at $94,288 after gaining 1.6% over the past 24 hours. The price has now risen nearly 15% over the past two weeks, reversing a previous correction phase and pushing BTC closer to retesting the $100,000 price mark. Amid the price performance, recent market analysis points to diverging signals between BTC’s funding rate behavior and growing confidence among US-based investors. Related Reading: Bitcoin Whales Back In Full Force For The Rally, Glassnode Reveals Bitcoin Funding Rates Drop Despite Rising Prices According to Nino, an analyst from CryptoQuant,  the Bitcoin funding ratetypically used to gauge sentiment in the perpetual futures BTC market has again dipped into negative territory, even as whale accumulation continues on major exchanges like Binance and Coinbase. Nino particularly identified a notable development in Bitcoins derivatives market. The 72-hour average of BTC funding rates, including moving average indicators (MA, EMA, WMA), has entered negative territory for the fourth time this year. Funding rates refer to periodic payments made between long and short positions on perpetual futures contracts, with negative rates meaning short positions are paying long positions. This generally reflects that the market is either positioning defensively or becoming cautious at current price levels. What makes this instance notable is that previous dips into negative funding rates occurred at lower price levels, whereas the current shift has taken place above $94,000. Nino suggests this may point to potential market exhaustion or a phase of profit-taking, where short traders are more active despite upward price movement. If volatility increases and funding rates remain suppressed, a spike in liquidations could follow, especially if open interest in leveraged positions expands rapidly. Coinbase Premium and Whale Behavior Reflect US Investor Activity In a separate analysis, CryptoQuant analyst Crypto Dan noted a trend reversal beginning around April 21, accompanied by renewed buying from large holders, or whales. Notably, these purchases were first identified on Binance and were soon followed by similar activity on Coinbase. According to Dan, this pattern may indicate rising confidence among US-based investors and growing participation from institutions or high-net-worth individuals. One supporting metric is the Coinbase premium, which tracks the price difference between BTC on Coinbase and other global exchanges. A positive premium typically reflects stronger demand from US investors. Related Reading: Bitcoin Metrics on Binance Show Shift That Could Precede Market Squeeze As of now, this premium remains in positive territory, suggesting that US market participants are contributing to BTCs recent momentum. Dan concludes that the current phase may signal more than a typical price rebound and could represent a broader shift in market structure, driven by renewed capital inflows and institutional positioning. Featured image created with DALL-E, Chart from TradingView

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Bitcoin Funding Rates Hit 14-Month High – What Could This Mean For The Market Leader?

The crypto market has started the year 2023 with a remarkable, bullish run. Over the last few days, several assets have recorded significant profits and are starting to pull through the crypto winter. Most notably, Bitcoin, the market leader and the world’s biggest digital asset, has been one of the top-performing coins this year. In the last seven days, BTC gained by more than 17%, allowing the coin to surpass the $20,000 price mark for the first time since the start of the FTX crisis. Bitcoin’s impressive price rally has generated much excitement among the crypto community, along with a significant rise in the positive sentiment around the entire crypto market. However, it appears there might be a need for alertness among investors in the coming days.  Related Reading: Bitcoin Price Touches $20,000 For First Time Post-FTX Collapse Bitcoin Records Highest Funding Rates In Over A Year  According to a post by Maartun, a top analyst on the crypto analytics platform Crypto Quant, Bitcoin funding rates have attained their highest values in 14 months. The Crypto Quant contributor further stated that the occurrence of high funding rates such as these usually resulted in Bitcoin experiencing a price pullback.  Funding rates are recurring payments made to either traders in a long or short position, depending on the difference between perpetual contract markets and spot prices. In essence, these payments serve as a method of maintaining the price of perpetual contracts close to the spot price of an asset – in this case, Bitcoin. That said, when there are highly positive funding rates on crypto exchanges, it indicates that traders are betting on the BTC/USD market to attain higher prices and are paying to go really long on BTC.  Trading positions such as these can be quite risky, as any slight price drop might lead to high levels of liquidation or force these traders to close their positions.  Therefore, these funding rates are definitely something that all BTC investors should keep their eyes on in the coming days. For now, Bitcoin is holding its ground, having gained by 1.83% in the last 24 hours, according to data by CoinMarketCap. At press time, the premier cryptocurrency is trading at $20,722.66, with a market cap value of $399.23 billion.  BTC Trading at $20,716 | Source: BTCUSD Chart on Tradingview.com.  Related Reading: Whale Moves Huge Amount Of Shiba Inu Tokens As SHIB Unveils To Metaverse What To Expect From Bitcoin In 2023? According to the popular price prediction site, BitNation, Bitcoin could attain a peak price of $37,307.77 before the years run out. Their price forecast also states that BTC investors should expect an average price of $31,084.84.  However, the team at Tradingbeasts are predicting a rather bearish Bitcoin market for 2023. According to their price projections, BTC is expected to record slight losses all through the year, closing its annual market with a maximum price of $18,339 and an average price of $14,671. So far, Bitcoin has shown a strong performance in 2023, gaining by over 25% since the beginning of the year. No doubt, the premier cryptocurrency is one asset to look out for in 2023.  Featured Image: Forbes, Chart from Tradingview.com  

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VanEck reissues $180K Bitcoin price target for current market cycle

VanEck says BTC can reach a price of $180,000 this cycle but warned that elevated funding rates could be showing early signs of overheating. 

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Bitcoin Funding Rates On BitMEX Turn Deep Red, Here’s Why This Is Bullish

Data shows the Bitcoin funding rates on the cryptocurrency exchange BitMEX have turned quite negative recently. Here’s why this may be bullish. Bitcoin Funding Rates On BitMEX Have Plunged To Deep Red Values As pointed out by an analyst in a CryptoQuant post, BTC felt a bullish boost the last time this pattern was observed. The “funding rate” is an indicator that measures the number of periodic fees that futures traders on a derivative exchange are currently exchanging between each other. When the value of this metric is positive, it means the holders of long contracts are currently paying a premium to the short holders in order to keep their positions. Such a trend implies that the majority of the investors on the exchange hold a bullish sentiment right now. On the other hand, negative values of the indicator suggest the shorts are overwhelming the longs at the moment. Naturally, this kind of trend is a sign of a bearish mentality being more dominant among the futures traders on the platform. In the context of the current discussion, the relevant derivative exchange is BitMEX. Here is a chart that shows the trend in the Bitcoin funding rates for this platform over the last year and a half: Looks like the value of the metric has been quite red in recent days | Source: CryptoQuant As shown in the above graph, the Bitcoin funding rates on the BitMEX exchange have taken a plummet toward deep negative values recently. This means that a large number of short contracts are piling up on the platform in comparison to long contracts. Related Reading: oin Plunge Under $28,000 Only Temporary? This Metric Suggests So Generally, when the futures market becomes too unbalanced towards any one side, a sharp price move in the opposite direction to what the investors are heavily betting on becomes more probable. This is because a mass liquidation event, called a “squeeze,” is generally more likely to take place towards the side that has more contracts open. In a squeeze, a swing in the price triggers a large amount of simultaneous liquidations and these liquidations only end up fueling said move further in return. A cascade of liquidations can then occur thanks to this amplified price move. Since the funding rates on BitMEX are heavily lopsided towards the negative side right now, a short squeeze is a possibility in the near term. From the chart, it’s visible that the indicator displayed a similar trend just earlier in the year. This negative spike in March occurred as Bitcoin’s price plunged below the $20,000 level, but these red values were only temporary, as a short squeeze took place not too long after and lead to BTC recovering in spectacular fashion. Related Reading: Litecoin (LTC) Falls Under $80, Is It Time To Buy Now? The metric observed some even more negative values following the November 2022 FTX crash, but the price didn’t see any appreciable surge following them. Though, nonetheless, Bitcoin still saw the bottom coincide with the red BitMEX funding rates. It now remains to be seen whether the pattern that was seen in March 2022 repeats this time as well, with BTC observing a short squeeze that reverses the current decline. BTC Price At the time of writing, Bitcoin is trading around $27,500, down 4% in the last week. BTC seems to have plummeted over the last couple of days | Source: BTCUSD on TradingView Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Funding Rates Most Positive Since Feb, Long Squeeze Soon?

Data shows that Bitcoin funding rates have risen to the greenest levels since February 2023, something that could increase the risk of a long squeeze. Bitcoin Funding Rates Are At Highest Levels Since February As pointed out by an analyst in a CryptoQuant post, longs have accumulated in the market recently. The “funding rates” is [...]

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