Rising Bitcoin Funding Rates Signal Market Optimism—But Is A Correction Looming?
09 Novembre 2024 - 6:00AM
NEWSBTC
Bitcoin recent price movement of continuous uptrend has drawn the
attention of market participants and analysts as it edges closer to
creating a new all-time high, blasting through critical resistance
levels. Amid this, a CryptoQuant analyst known as
TraderOasis provided an in-depth analysis of Bitcoin’s
market earlier today, suggesting the trajectory the asset
could head to next. Related Reading: Analyst Predicts Bitcoin Bull
Run: MVRV Metric Hints At $95K To $120K Target Analysis On Bitcoin
Oasis explained that his previously outlined bullish scenario for
the Range 0.5 structure had played out successfully, emphasizing
the importance of Bitcoin’s previous all-time high (ATH) level as
potential support. This level, represented by the blue line in his
chart analysis (shown above), could be a critical marker for
Bitcoin’s next phase, the analyst reveals. The analyst also
highlighted the significance of the Coinbase Premium Index, which
often indicates strong buying demand on Coinbase relative to other
exchanges. Oasis noted that the bullish shift in this indicator was
accompanied by an upward price move, marking an important
resistance zone that Bitcoin needs to overcome to sustain its
momentum. Furthermore, he pointed out that the open interest
indicator, which tracks the total number of outstanding derivative
contracts, was moving alongside the price. According to him, this
is a positive signal indicating that market participation remains
strong without signs of instability or excessive leverage. Rising
Funding Rates And Exchange Netflow Observations TraderOasis also
delved into another key metric: funding rates. These rates reflect
the cost of holding long positions in perpetual futures contracts
and can signal market sentiment. The analyst observed that funding
rates had begun to rise again, suggesting that market participants
are increasingly confident about further upward movement. However,
he cautioned that this sentiment had not yet reached extreme levels
that could indicate overheating or a potential correction. The
analyst mentioned monitoring these levels is essential, as
excessive funding rates often signal market tops or heightened
volatility. Another aspect of analysis was the activity observed in
exchange netflow for spot exchanges. According to Oasis, a
significant sell-off was reflected in this indicator, which
measures the net flow of Bitcoin into and out of exchanges. Given
the potential for increased volatility, the analyst interpreted
this as a signal to consider taking profits on long trades. This
aligns with previous market patterns where high net inflows or
outflows often foreshadow shifts in market sentiment and price
direction. Related Reading: Bitcoin Path To $85K: Analysts Say It’s
Behaving ‘As Predicted’ Meanwhile, Bitcoin so far appears to have
found stability above $75,000 price mark following its latest ATH
of $76,872 yesterday. At the time of writing, the asset currently
trades for $75,820, up by 0.9% in the past day. Featured image
created with DALL-E, Chart from TradingView
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