Bitcoins
Data shows the Bitcoin futures funding rate has declined to neutral on the top three exchanges. Here’s where this could lead the asset’s price.
Bitcoins Bitcoin Futures Market Sentiment Has Turned Neutral
In a new post on X, CryptoQuant author Axel Adler Jr has discussed about the latest trend in the Bitcoin Funding Rate for the three top exchanges in the cryptocurrency sector.
The “Funding Rate” here refers to an indicator that keeps track of the total amount of periodic fees that futures market holders are exchanging between each other on a given platform.
When the value of this metric 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 the dominant one on the exchange.
On the other hand, the indicator being negative suggests the short holders are outweighing the long ones and a bearish mentality is shared by the majority.
Now, here is the chart shared by the analyst that shows the trend in the 7-day simple moving average (SMA) of the mean Bitcoin Funding Rate on the top three exchanges: Binance, Bybit, and OKX.
As is visible in the above graph, the 7-day SMA of the Bitcoin Funding Rate on these platforms rose to a notable positive level during the rally in the last couple of months of 2024, implying the futures market sentiment was quite bullish.
With the consolidation that has followed for BTC since the top, though, the enthusiasm on Binance and company has dropped. Following the latest bearish price action, the indicator has even returned to the 0% mark, meaning that the users are now completely undecided on where the cryptocurrency would go from here.
In the chart, the analyst has highlighted the past instances where the metric saw a similar retest of the 0% level. It would seem that Bitcoin has generally gone on to observe some bullish momentum every time that the indicator has touched this line during the current cycle.
The reason behind this trend lies in the fact that a mass liquidation event, popularly known as a squeeze, is more likely to affect the side of the sector that has the more investors.
During bull runs, whenever the Funding Rate becomes too positive, a long squeeze tends to occur, wiping out all the positions. These liquidations then provide fuel for a move in the downwards direction.
With the Funding Rate at neutral right now, both shorts and longs are at an about equal risk of seeing a squeeze, so Bitcoin could kickstart a rally without encountering an obstacle immediately.
Bitcoins BTC Price
At the time of writing, Bitcoin is trading around $97,200, down more than 2% over the last seven days.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Bitcoins
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
Disclaimer: The information found on NewsBTC is for educational purposes
only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any
investments and naturally investing carries risks. You are advised to conduct your own
research before making any investment decisions. Use information provided on this website
entirely at your own risk.
Keshav Verma Read More