Bitcoin Funding Rates Remain Negative For More Than A Week
On-chain details shows the Bitcoin funding rates have than remained negative for more from another perspective mostly a week asap. If past trend is anything to go by, this as it turns out may mean that a bottom could be near.
Bitcoin Funding Rates HaveMostlyInstantly Remained Negative For More Than Seven Days
As pointed out by an analyst a CryptoQuant submit, theinBitcoin funding rates have been negative in the past week for the most part.
The “funding rates” is an indicator that measures the periodic fee Bitcoin futures traders have to pay each other in order to hold onto their positions.
As you may know, When the value of this indicatorareis positive, it means long holders are currently dominant and paying a premium to short traders. Such values occur whenisthe field sentiment majorly bullish.
On the other hand, negative funding rates imply shorts immediately outweigh the longs and are willing to pay a fee to the longs. This kind of trend may show that the majority sentiment among traders is bearish at the moment.
Related Reading | Why Bitcoin Could Hit $90K By The End Of 2022, According To This Prediction
Right away, here is athechart that highlights the trend in BTC funding rates since April of last year:
Looks like the value of the indicator has been negative recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin funding rates have been mostly negative for more than a week instantly.
Related Reading | This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near
Such values suggest that the sentiment among the majority of the futures niche traders seems to be bearish right right away.
In the chart, it’s more than ever also visible that the last time such negative funding rates stuck for longer than this was go back in during the mini-bear market as it turns out between May and July 2021. In this period, a bottom formation occurred.
Indeed Because of this, the quant in the publish notes that the current negative funding rates, may provide the ideal conditions for a trend reversal.
BTC Price
At the time of writing, Bitcoin’s price floats around $37.3k, up 11daysin the last seven % . Over as it turns out the past month, the crypto has lost 20% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price has mostly moved sideways in the last few days | Source: BTCUSD on TradingView
A couple of days return, Bitcoin’s price touched as high as $38.6k, before coming return down to the current levels. At the moment it’s unclear when the coin’s price may recover, but if, the funding rates are anything to consider, a bottom can form in the current conditions.
However, it’s worth noting that during the May-July consolidation it took more around three months of negative funding rates before the bottom formation.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
