Bitcoin Funding Rates Turn Negative In Sentiment Reset
07 Décembre 2021 - 8:00PM
NEWSBTC
Data shows following the crash, Bitcoin funding rates flipped to
negative for the first time since September as market sentiment
resets. Bitcoin Funding Rates Turn Negative For The First Time
Since Late September As per the latest weekly report from
Glassnode, market sentiment reset after the latest crash in BTC’s
price as funding rates turned negative. The “perpetual funding
rate” is an indicator that measures the periodic fee that Bitcoin
futures traders have to pay each other to keep their positions.
This metric helps us know about which direction leveraged positions
tend to. When the indicator’s value is negative, it means short
traders are currently paying long traders to hold on to their
position. Such a trend may show that the market sentiment is
bearish on the price of BTC. On the other hand, if the metric’s
value is positive, it means the market shares a majority bullish
bias as long traders pay a premium to the short traders. Now, here
is a chart that shows the trend in the Bitcoin funding rates over
the past six months: Looks like the funding rates dipped to
negative recently | Source: The Glassnode Week Onchain (Week 49) As
you can see in the above graph, the funding rates have been
positive for many months now, but following the crash they have
turned negative. Related Reading | Understanding Bitcoin UTXO:
Mid-To-Long Term Holders Responsible For November Correction The
reason for this switch is that due to the crash, there was a
cascade of long liquidations. This kind of situation can push the
funding rates down and to the opposite side. These long
liquidations resulted in the open interest being flushed of $5.4
billion in futures contracts. And subsequently, the funding rates
declined to around -0.035%. While this is the first time since late
September that the funding rates have turned negative, such highly
negative values were only seen back in July. Related Reading
| Data Shows Bitcoin Short-Term Holders Have Started To Sell
At A Loss This flip to negative means that the Bitcoin market
sentiment has now been reset. BTC Price At the time of writing,
Bitcoin’s price floats around $51.3k, down 12% in the last seven
days. Over the past month, the crypto has lost 16% in value. The
below chart shows the trend in the price of the crypto over the
last five days. BTC's price recovers a bit from the crash in the
past 24 hours | Source: BTCUSD on TradingView A few days back,
Bitcoin’s price crashed down to $42k. Quickly after, it recovered a
bit to higher levels, and then consolidated for a couple of days.
In the past day, the coin has shown some recovery as it has once
again broke above $51k. Featured image from Unsplash.com, charts
from TradingView.com, Glassnode
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