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