Bitcoin Price Dipping, But Funding Rates Across 11 Exchanges Still In The Positive Territory

The price of Bitcoin is gradually retaining its upward trend as the flagship asset eyes the $100,000 pivotal mark after a slight rebound on Monday. During the waning price performances over the past few days, recent data shows that BTC’s funding rates have persistently maintained a bullish sentiment.

BTC’s Funding Rates Defies Market Dip

Bitcoin has faced bearish pressure over the past few days, causing its price to retest the $94,000 range. Despite the notable price drop, funding rates across several crypto exchanges remain positive. 

Alphratcal, an advanced investment and data analytics firm reported the development in an X post. Data from the platform shows that Bitcoin’s aggregated funding rates have sustained a bullish trend among 11 crypto exchanges, signaling that traders are maintaining an optimistic sentiment. 

Simply put, more traders are placing leveraged long-term bets on BTC than short-term bets as they anticipate a price recovery. This implies that long-term investors are covering the funding fees, which are assessed every 8 hours, while short-term investors are being paid.

An increase in long-term positions showcases investors’ robust confidence in BTC’s long-term potential. Should this positive trend continue, the development might spur renewed momentum in the upcoming days, allowing the asset to reclaim key resistance levels.

According to Alphractal, Bitfinex (BTC-USDT) has the highest funding rate at the moment, while BitMEX (XBTUSD) and OKX (BTC-USD-SWAP) are the only two crypto exchanges with negative funding rates. The gap suggests that traders have different opinions about the market across different platforms.

Addressing what the development could mean for Bitcoin, Alphractal stated that if the funding rate stays positive, it can be a sign of overconfidence and the possibility of liquidation should BTC’s price continue to fall. However, it can indicate a more bearish market for BTC where short positions dominate if the rate turns negative across the board.

In the meantime, Alphractal highlighted that most exchanges still display positive funding rates as they maintain an overall average above zero. Specifically, maintaining an overall average above zero suggests that the market is not yet generally bearish even though it has declined.

Coinbase Premium Index Turns Green

Another metric that has turned positive amid waning price movements is the Coinbase Premium Index. A rise in the metric demonstrates renewed confidence and demand in BTC among US institutional investors.

Related Reading: Bitcoin Coinbase Premium Index Flips Positive As Market Euphoria Increases, A Rally Imminent?

Since the index turned positive, it has impacted BTC positively, causing a rebound from the $94,000 mark to the $97,000 level. However, the flagship asset must recover above $100,000 in order to establish prolonged upward momentum.

At the time of writing, Bitcoin has fallen by over 2%, bringing its price to the $97,400 level. With investors’ sentiment rising as evidenced by a nearly 84% increase, the drop may shift toward the upside shortly.

Featured image from Unsplash, chart from Tradingview.com