Bitcoin price experienced an increase after the previous week’s gloomy performance. bullish impetus The 13th of February was Friday. The premier cryptocurrency appeared to be on the way back up to the psychologically important $70,000 mark as the weekend approached. On-chain data indicates that, in the short term, this bullish spike could be the beginning of the Bitcoin rally.
Bitcoin on the verge of a short squeeze?
CryptoOnchain posted this Quicktake on CryptoQuant. revealed that the Bitcoin Funding Rate on Binance, the world’s largest cryptocurrency exchange by trading volume, has dropped to a critically low level — one not seen in over a year. Here, the relevant indicator is BTC’s 14-day Simple Moving Average.
The Funding Rate is a metric that estimates the fee charged by traders on a derivatives exchange for an individual cryptocurrency. In this instance, it’s Bitcoin. The funding rate will be positive when the market is trading in derivatives. This means the traders with long positions (investors who have bought positions) pay a fee to the traders with short positions (investors who are selling positions).
As an alternative, the current negative funding rate indicates the money is being transferred from the short-term traders to the longer-term ones. According to CryptoQuant data, the 14-day moving average of Binance’s Bitcoin Funding Rate has reached a low level -0.002 since September 20,24.
CryptoOnchain has noted this correctly. deeply negative funding rateThe fact that the bears are increasing their bets against bitcoin, and especially that it is over 14 days, shows that they have become more aggressive. Market analyst pointed out that extreme negative values are often correlated with the bottoms of steep downward trends.
CryptoOnchain posted the following:
On-chain, and from a market psychology standpoint, funding rates that are deeply negative can often be seen as a powerful Contrarian Signal. Markets currently appear to be highly volatile. “overcrowded” On the shorter side
This on-chain tendency has historically often been the catalyst for a powerful short squeeze. For example, even a slight price rise could cause a cascade to liquidate the increasing short positions. This series of short liquidations is often used as fuel to propel the Bitcoin price higher.
Bitcoin Price at a Glance
Bitcoin’s price is currently around $69,000. This represents a 5% increase in just the last 24 hours.
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Source: www.newsbtc.com
