On-chain information exhibits the Bitcoin funding fee remains 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 Fee Has Been At A Optimistic Worth Throughout The Final Few Days
As identified by an analyst in a CryptoQuant post, 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 presently paying a premium to the brief 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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Then again, damaging values of the indicator indicate the bulk sentiment is bearish proper now as shorts are paying longs presently.
Now, here’s a chart that exhibits the development within the Bitcoin funding charges during the last six months:
The worth of the metric appears to have been constructive prior to now week | Supply: CryptoQuant
As you’ll be able to see within the above graph, every time the Bitcoin funding fee has reached a comparatively excessive constructive 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 constructive values imply longs are piling up available in the market. So, a major 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 known as a “squeeze” (or on this case, an extended squeeze).
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A couple of 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. Nevertheless, the present worth of the indicator nonetheless appears to be like to be fairly constructive, which can imply the decline remains to be ongoing.
BTC Worth
On the time of writing, Bitcoin’s worth 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 worth of the coin during the last 5 days.
Seems to be 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
