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BitcoinSistemi 2025-01-08 18:34:08

What Do Bitcoin Funding Rates Tell Us? Analytics Company Reveals Critical Level Where BTC Price Should Not Fall

Cryptocurrency analytics firm CryptoQuant has expressed concern over the strength of Bitcoin’s recent move, citing the drop in funding rates as a signal of weak demand in the derivatives market. Funding rates, which measure the cost of holding a long position in Bitcoin futures, are considered a critical indicator of market sentiment and momentum. During Bitcoin’s recent rally, funding rates saw a noticeable increase amid the rally, indicating a delayed influx of demand from the derivatives market. However, funding rates have declined sharply since Bitcoin’s decline from the key $108,000 resistance level. CryptoQuant noted that this decline highlights two key concerns: Capital Exodus: Investors have reduced their reliance on the derivatives market, signaling declining confidence. Weak Bullish Momentum: The lack of strong support from derivatives participants raises doubts that Bitcoin can sustain its bullish trend. Related News: Critical Rate Cut Remarks from Senior FED Member Waller Ahead of Hot FED Minutes CryptoQuant noted that it is important for Bitcoin to stay above the $90,000 support level. Failure to do so could lead to: Increased Selling Pressure: Loss of confidence among investors could lead to a sell-off. Deeper Corrections: Bitcoin could potentially test lower Fibonacci retracement levels or other psychological thresholds, further dampening market sentiment. Despite the current challenges, CryptoQuant has highlighted a potential path forward. If funding rates recover alongside strong buying activity, Bitcoin could stabilize above key support levels and potentially resume its upward trajectory. *This is not investment advice. Continue Reading: What Do Bitcoin Funding Rates Tell Us? Analytics Company Reveals Critical Level Where BTC Price Should Not Fall

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