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Breaking News: Major Win For Memecoins: SEC Affirms They Typically Do Not Qualify As Securities

Bitcoin Funding Rates Remain Negative For More Than A Week

Keshav Verma
Keshav Verma
3 years ago
3 mins read

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On-chain data shows the Bitcoin funding rates have mostly remained negative for more than a week now. If past trend is anything to go by, this may mean that a bottom could be near.

Bitcoin Funding Rates Have Now Remained Mostly Negative For More Than Seven Days

As pointed out by an analyst in a CryptoQuant post, the Bitcoin funding rates have been negative in the past week for the most part.

The “funding rates” is an indicator that measures the periodic fee Bitcoin futures traders have to pay each other in order to hold onto their positions.

When the value of this indicator is positive, it means long holders are currently dominant and are paying a premium to short traders. Such values occur when the market sentiment is majorly bullish.

On the other hand, negative funding rates imply shorts now outweigh the longs and are willing to pay a fee to the longs. This kind of trend may show that the majority sentiment among traders is bearish at the moment.

Related Reading | Why Bitcoin Could Hit $90K By The End Of 2022, According To This Prediction

Now, here is a chart that highlights the trend in the BTC funding rates since April of last year:

Looks like the value of the indicator has been negative recently | Source: CryptoQuant

As you can see in the above graph, the Bitcoin funding rates have been mostly negative for more than a week now.

Related Reading | This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near

Such values suggest that the sentiment among the majority of the futures market traders seems to be bearish right now.

In the chart, it’s also visible that the last time such negative funding rates stuck for longer than this was back in during the mini-bear market between May and July 2021. In this period, a bottom formation occurred.

Because of this, the quant in the post notes that the current negative funding rates may provide the ideal conditions for a trend reversal.

BTC Price

At the time of writing, Bitcoin’s price floats around $37.3k, up 11% in the last seven days. Over the past month, the crypto has lost 20% in value.

The below chart shows the trend in the price of BTC over the last five days.

Bitcoin Price Chart

BTC's price has mostly moved sideways in the last few days | Source: BTCUSD on TradingView

A couple of days back, Bitcoin’s price touched as high as $38.6k, before coming back down to the current levels. At the moment, it’s unclear when the coin’s price may recover, but if the funding rates are anything to consider, a bottom can form in the current conditions.

However, it’s worth noting that during the May-July consolidation it took more around three months of negative funding rates before the bottom formation.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Read more

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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