On-chain information exhibits the Bitcoin funding fee continues to be at a comparatively excessive constructive worth, suggesting that the crypto would possibly see extra decline within the close to time period.
Bitcoin Funding Charge Has Been At A Constructive Worth Throughout The Final Few Days
As identified by an analyst in a CryptoQuant publish, the present funding fee means that the worth is in a brand new decline proper now.
The “funding fee” is an indicator that measures the periodic charge that merchants within the Bitcoin futures market need to pay one another.
When the worth of this metric is above zero, it means lengthy merchants are at the moment paying a premium to the quick merchants to maintain their positions. Such values point out {that a} bullish sentiment is extra dominant available in the market for the time being.
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Alternatively, unfavorable values of the indicator indicate the bulk sentiment is bearish proper now as shorts are paying longs at the moment.
Now, here’s a chart that exhibits the development within the Bitcoin funding charges over the past six months:
The worth of the metric appears to have been constructive prior to now week | Supply: CryptoQuant
As you possibly can see within the above graph, at any time when the Bitcoin funding fee has reached a comparatively excessive constructive worth throughout the previous couple of months, the worth of the crypto has typically noticed a decline not too lengthy after. Equally, unfavorable spikes have resulted within the worth of BTC seeing some uptrend.
Right here’s what’s occurring right here: excessive constructive values imply longs are piling up available in the market. So, a big sufficient sudden decline can liquidate numerous these, which may find yourself driving the worth additional down, and thus liquidating much more lengthy positions. Such an occasion the place liquidations cascade collectively is named a “squeeze” (or on this case, a protracted squeeze).
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Just a few days again, when the worth of the crypto was above $23k, the funding fee once more made a constructive peak and the worth subsequently went down. Nonetheless, the present worth of the indicator nonetheless seems to be fairly constructive, which can imply the decline continues to be ongoing.
BTC Value
On the time of writing, Bitcoin’s value floats round $22.7k, up 6% within the final seven days. Over the previous month, the crypto has gained 8% in worth.
The beneath chart exhibits the development within the value of the coin over the past 5 days.
Appears like the worth of the crypto has been sliding down over the previous couple of days | Supply: BTCUSD on TradingView
Featured picture from Brent Jones on Unsplash.com, charts from TradingView.com, CryptoQuant.com
