On-chain data shows the Bitcoin funding rate is still at a relatively high positive value, suggesting that the crypto might see more decline in the near term.
Bitcoin Funding Rate Has Been At A Positive Value During The Last Few Days
As pointed out by an analyst in a CryptoQuant post, the current funding rate suggests that the price is in a new decline right now.
The “funding rate” is an indicator that measures the periodic fee that traders in the Bitcoin futures market have to pay each other.
5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!When the value of this metric is above zero, it means long traders are currently paying a premium to the short traders to keep their positions. Such values indicate that a bullish sentiment is more dominant in the market at the moment.
Related Reading | On-Chain Data: Bitcoin Whales With 10k+ BTC Have Been Growing
On the other hand, negative values of the indicator imply the majority sentiment is bearish right now as shorts are paying longs currently.
BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner? Get 110 USDT Futures Bonus for FREE!Now, here is a chart that shows the trend in the Bitcoin funding rates over the last six months:
As you can see in the above graph, whenever the Bitcoin funding rate has reached a relatively high positive value during the last few months, the price of the crypto has generally observed a decline not too long after. Similarly, negative spikes have resulted in the value of BTC seeing some uptrend.
Read our comparison of 50 different crypto casinos. Find out who has most generous bonuses, best UX, knowledgeable customer support and best provably fair games.Here’s what’s going on here: high positive values mean longs are piling up in the market. So, a significant enough sudden decline can liquidate a lot of these, which can end up driving the price further down, and thus liquidating even more long positions. Such an event where liquidations cascade together is called a “squeeze” (or in this case, a long squeeze).
Related Reading | Bitcoin NUPL Shows Average Holder Back In Profit, But For How Long?
A few days back, when the price of the crypto was above $23k, the funding rate again made a positive peak and the price subsequently went down. However, the current value of the indicator still looks to be quite positive, which may mean the decline is still ongoing.
BTC Price
At the time of writing, Bitcoin’s price floats around $22.7k, up 6% in the last seven days. Over the past month, the crypto has gained 8% in value.
The below chart shows the trend in the price of the coin over the last five days.
