On-chain knowledge reveals the Bitcoin funding charge continues to be at a comparatively excessive optimistic worth, suggesting that the crypto may see extra decline within the close to time period.
Bitcoin Funding Fee Has Been At A Optimistic Worth Throughout The Final Few Days
As identified by an analyst in a CryptoQuant post, the present funding charge means that the worth is in a brand new decline proper now.
The “funding charge” 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 presently paying a premium to the brief merchants to maintain their positions. Such values point out {that a} bullish sentiment is extra dominant out there in the intervening time.
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Alternatively, damaging values of the indicator suggest the bulk sentiment is bearish proper now as shorts are paying longs presently.
Now, here’s a chart that reveals the pattern within the Bitcoin funding charges over the past six months:
The worth of the metric appears to have been optimistic prior to now week | Supply: CryptoQuant
As you may see within the above graph, at any time when the Bitcoin funding charge has reached a comparatively excessive optimistic worth throughout the previous few months, the worth of the crypto has typically noticed a decline not too lengthy after. Equally, damaging spikes have resulted within the worth of BTC seeing some uptrend.
Right here’s what’s happening right here: excessive optimistic values imply longs are piling up out there. So, a major sufficient sudden decline can liquidate numerous these, which might 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 charge once more made a optimistic peak and the worth subsequently went down. Nonetheless, the present worth of the indicator nonetheless appears to be like to be fairly optimistic, which can imply the decline continues to be ongoing.
BTC Worth
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 reveals the pattern within the value of the coin over the past 5 days.
Seems like the worth of the crypto has been sliding down over the previous few days | Supply: BTCUSD on TradingView
Featured picture from Brent Jones on Unsplash.com, charts from TradingView.com, CryptoQuant.com