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BitcoinSistemi 2024-12-21 15:50:07

Analytics Firm Analyzes Funding Rates in Bitcoin – Here’s How to Interpret Them and the Movement in the Recent Drop

Cryptocurrency analytics firm Alphractal has provided insight into the latest Bitcoin market dynamics by revealing the relationship between the Funding Rate of perpetual futures contracts and Bitcoin price action. The Funding Rate, which reflects the balance between buyers and sellers, tends to rise when optimism dominates the market. A high Funding Rate usually indicates an increase in long positions as traders expect further price increases. However, Alphractal’s analysis points to an interesting deviation in current market behavior. While the Funding Rate remains high, Bitcoin’s price has begun to fall. The company outlines three possible explanations for this phenomenon: Over-Optimism: A wave of longs entered the market during Bitcoin’s recent price rally, inflating the Funding Rate. However, the lack of sustained buying pressure triggered a price correction. Selling Pressure: Long holders taking profits or strategically entering short positions at high Funding Rate levels may have caused prices to pull back. Short-Term Support: Despite the decline, a positive Funding Rate indicates market confidence. A stabilization or further decline in the Funding Rate could provide clues about a potential shift in sentiment. Related News: Big Bull Michael Saylor Shares Draft to Spark Bitcoin Revolution in the US Alphractal warns that the combination of a persistently high Funding Rate and falling prices could increase the risk of liquidation in the market. Tracking the trajectory of the Funding Rate could be crucial to predicting Bitcoin’s next moves. *This is not investment advice. Continue Reading: Analytics Firm Analyzes Funding Rates in Bitcoin – Here’s How to Interpret Them and the Movement in the Recent Drop

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