Bitcoin Funding Rate Remains Positive, More Decline Soon?

    On-chain information reveals the Bitcoin funding fee continues to be at a comparatively excessive constructive worth, suggesting that the crypto would possibly see extra decline within the close to time period.

    Bitcoin Funding Rate Has Been At A Positive Value During The Last Few Days

    As identified by an analyst in a CryptoQuant post, the present funding fee means that the worth is in a brand new decline proper now.

    The “funding rate” is an indicator that measures the periodic charge that merchants within the Bitcoin futures market need to pay one another.

    When the worth of this metric is above zero, it means lengthy merchants are at the moment paying a premium to the quick merchants to maintain their positions. Such values point out {that a} bullish sentiment is extra dominant available in the market for the time being.

    Related Reading | On-Chain Data: Bitcoin Whales With 10k+ BTC Have Been Growing

    On the opposite hand, damaging values of the indicator suggest the bulk sentiment is bearish proper now as shorts are paying longs at the moment.

    Now, here’s a chart that reveals the pattern within the Bitcoin funding charges during the last six months:

    Bitcoin Funding Rate

    The worth of the metric appears to have been constructive previously week | Source: CryptoQuant

    As you may see within the above graph, each time the Bitcoin funding fee has reached a comparatively excessive constructive worth throughout the previous couple of months, the worth of the crypto has usually noticed a decline not too lengthy after. Similarly, damaging spikes have resulted within the worth of BTC seeing some uptrend.

    Here’s what’s occurring right here: excessive constructive values imply longs are piling up available in the market. So, a big sufficient sudden decline can liquidate plenty of these, which may find yourself driving the worth additional down, and thus liquidating much more lengthy positions. Such an occasion the place liquidations cascade collectively known as a “squeeze” (or on this case, an extended squeeze).

    Related Reading | Bitcoin NUPL Shows Average Holder Back In Profit, But For How Long?

    Just a few days again, when the worth of the crypto was above $23k, the funding fee once more made a constructive peak and the worth subsequently went down. However, the present worth of the indicator nonetheless appears to be fairly constructive, which can imply the decline continues to be ongoing.

    BTC Price

    At the time of writing, Bitcoin’s price floats round $22.7k, up 6% within the final seven days. Over the previous month, the crypto has gained 8% in worth.

    The under chart reveals the pattern within the value of the coin during the last 5 days.

    Bitcoin Price Chart

    Looks like the worth of the crypto has been sliding down over the previous couple of days | Source: BTCUSD on TradingView
    Featured picture from Brent Jones on, charts from,

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