Bitcoin Funding Rates Turn Negative: Shorts Turn To Get Squeezed?

Data shows the Bitcoin funding rates on exchanges have turned negative, a sign that the shorts have now become the dominant force in the market. Bitcoin Funding Rates Have Turned Negative After Market Crash As pointed out by an analyst in a CryptoQuant Quicktake post, the Bitcoin funding rates have seen a sharp decline recently. The “funding rate” refers to a metric that keeps track of the periodic fee that derivatives contract holders are currently exchanging with each other. When the value of this indicator is positive, it means the long investors are paying a premium to the short ones in order to hold onto their positions. Such a trend implies a bullish sentiment is shared by the majority in the sector. Related Reading: Chainlink (LINK) Recovers 20% As Network Lights Up With Activity On the other hand, the metric being negative implies a bearish mentality could be the dominant one in the market as the short holders outweigh the longs. Now, here is a chart that shows the trend in this Bitcoin indicator for all exchanges over the past few months: As displayed in the above graph, the Bitcoin funding rate had been positive throughout the year 2024, save for a couple of small dips into the negative region, until this latest crash, which finally took the indicator to notable red values. The earlier positive values were naturally due to the fact that the market had a bullish atmosphere to it, so the average investor was trying to bet on the price to rise. From the graph, it’s visible that this positive sentiment was the strongest during the rally to the all-time high (ATH) price fueled by the spot exchange-traded fund (ETF) demand. During the consolidation period that had followed this rally, BTC had seen a couple of notable drawdowns, but they weren’t enough to shake off the bullish mood. The recent sharp crash, though, appears to have finally caused investors to have a bearish outlook on the cryptocurrency. The Bitcoin crash had resulted in a huge amount of long liquidations in the market, triggering what’s known as a squeeze. In a squeeze event, a sharp swing in the price causes mass liquidations, which in turn fuels the price move further. This then unleashes a cascade of more liquidations. Since the latest such event involved the longs, it would be called a long squeeze. In general, an event of this kind is more likely to affect the side of the derivatives market that is more dominant. As this power balance has shifted towards the shorts now, it’s possible that the market could instead see a short squeeze in the near future. Related Reading: Is Bitcoin In A Bear Market Now? Heres What On-Chain Data Suggests Naturally, it’s not necessary that a short squeeze should take place, but if the price ends up witnessing some volatility, it’s possible it may end up punishing the short-heavy market. BTC Price Bitcoin has been steadily making recovery from the crash as its price has now climbed back to $57,500. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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4 reasons why Bitcoin was (and still is) a buy below $70K

Technical chart patterns suggest that Bitcoin could see more upside momentum in the following weeks, mirroring previous bull cycles.

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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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Bitcoin Primed For A Short Squeeze

Santa Rally after all? On-chain analysis shows that Bitcoin is primed for a short squeeze. If the bulls push Bitcoin to a daily close above $52k, we may see it sooner than later.  Covered: Bitcoin On-Chain Metrics The Funding Rate Metric Potential Short Squeeze Imminent One of the more critical on-chain metrics to look at […]

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Sky-high Bitcoin funding rates show a leveraged yet bullish market

Bitcoin’s perpetual futures funding rate represents the cost traders incur to maintain long or short positions in the perpetual swaps market, with fees shifting between buyers and sellers based on market conditions. Positive funding rates suggest that long positions dominate, reflecting bullish sentiment, while negative rates indicate bearish sentiment as short positions dominate. Changes in […]

The post Sky-high Bitcoin funding rates show a leveraged yet bullish market appeared first on CryptoSlate.

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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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Number Of Bitcoin Bulls Increases As Funding Rate Shows Steady Growth Details

Bitcoin has rebounded strongly from the $65,000 mark after a 6% dip from Mondays high of around $69,500. Despite the recent pullback, BTC remains in a bullish trend that has been in place since early September. This rebound shows resilience, helping maintain the bullish market structure.  Key data from CryptoQuant reveals that the average funding rate has steadily grown since September, indicating that bullish sentiment is increasing as more traders actively engage in the market. Related Reading: Solana Stays Strong Despite BTC Drop $176 Next? The coming two weeks will be pivotal for Bitcoin as it approaches Marchs all-time high. Investors and analysts closely watch price movements as BTC builds momentum toward breaking key resistance levels. If the bullish trend continues, Bitcoin could be poised for another significant rally, with the potential to set new highs shortly. However, any failure to hold current levels could bring renewed volatility. Bitcoin Showing Strength Despite a recent dip, Bitcoin remains strong above key demand levels, maintaining the overall bullish structure. Analysts and investors are closely monitoring the price action for confirmation that the current phase is simply a bullish consolidation before the next leg up.  CryptoQuant analyst Axel Adler shared data on X, highlighting the BTC futures perpetual funding rate, which has shown steady growth since Bitcoin reached the $60,000 level. This indicates a growing number of bulls entering the market, with optimism rising as the price pushes higher. Adler suggested that bullish momentum will likely continue as long as this funding rate increases, reinforcing that BTC is in a healthy consolidation phase. However, this doesnt guarantee an immediate breakout. There is still a significant chance that Bitcoin may trade sideways over the next few days. Sideways price action could be essential for building liquidity, allowing the market to gather strength for a larger move. Related Reading: Dogecoin Breaks Above $0.12 Level Time For DOGE To Catch Up? While the market sentiment remains optimistic, especially with the ongoing increase in bullish activity, investors should prepare for potential fluctuations. The next major price action could go in either direction, but the steady support above key levels is a positive indicator for those betting on further upside in Bitcoins price. BTC Holding Above Key Demand  Bitcoin is holding strong above the $66,000 level after finding support around $65,000. Currently trading at $67,100, the market seems to be in a consolidation phase, and it may take some time before a breakout above the crucial $70,000 level.  For the bulls to maintain momentum, its essential that the price holds above $65,000 or finds support around the $64,300 mark, where both the 4-hour exponential moving average (EMA) and moving average (MA) align. Related Reading: Bitcoin Bears Lose Control As BTC Net-Taker Volume Shifts Positive If Bitcoin fails to maintain these support levels, a deeper correction could be expected, with the price potentially retracing to lower demand zones around $60,000. On the other hand, if BTC manages to break and hold above $70,000 in the coming days, this could trigger a strong rally toward challenging all-time highs. With investors closely monitoring key support and resistance levels, the next few days will be crucial for determining Bitcoins direction. Featured image from Dall-E, chart from TradingView

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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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