Bitcoin Funding Rates Fall Below Zero In Market Sentiment Reset
November 16 2021 - 2:00PM
NEWSBTC
Yesterday, funding rates fell below zero in a market sentiment
reset as Bitcoin’s price declined following its new all-time high.
Bitcoin Funding Rates Briefly Fell Below Zero Yesterday As per the
latest weekly report from Arcane Research, the funding rates have
plummeted following a spike around when BTC made a new ATH.
Yesterday, they briefly went below zero. The “funding rate” is a
Bitcoin indicator that tells us about the current periodic payments
that futures contract traders are making between each other. When
the metric has positive values, it means long traders are paying
short traders to keep their positions. Such a situation suggests
that the market sentiment is currently bullish. On the other hand,
negative values of the indicator imply short traders are paying a
premium to hold their positions. This trend may mean that the
market sentiment is bearish at the moment. Now, here is a chart
that shows how the value of the Bitcoin funding rate has changed in
the past couple of months: Looks like the funding rates have
plummeted recently | Source: The Arcane Research Weekly Update -
Week 45 As the above graph shows, when Bitcoin made a new ATH
around $69k earlier in the month, the indicator also showed a big
positive spike. Related Reading | Bulls Giving Up? Massive
Bitcoin Bid Wall Removed, What It Could Mean For BTC However, BTC
couldn’t keep the momentum up and the price started falling shortly
after. The funding rates plummeted down hard along with it. Because
of this decline in the price of Bitcoin, November 10th observed
about $500 million worth of long liquidations. Many traders seem to
have bet on BTC’s price moving further up after its new ATH so they
opened new leveraged long positions. But due to the crash, these
positions ended up being liquidated. On November 15th (that is,
yesterday), the indicator’s value briefly went below zero. This is
the first time it has happened since the end of September. Related
Reading | Confirmed: AMC Now Accepts Bitcoin, Ethereum, Two
Other Cryptos, Dogecoin To Follow Currently, the funding rates are
just above zero. It looks like balance has returned to the market
as there are equal amounts of short and long demands. However, with
BTC’s latest downtrend, this balance may soon shift. BTC Price At
the time of writing, Bitcoin’s price is trading around $60.9k, down
8% in the last seven days. Over the past thirty days, the crypto
has gained 0.3% in value. The below chart shows the trend in the
price of the coin over the last five days. BTC has continued its
decline as it plunges down in the last couple of days | Source:
BTCUSD on TradingView Featured image from Unsplash.com, charts from
TradingView.com, Arcane Research
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