Bitcoin Funding Rates Remain Unmoved Despite Plunge To $30,000
11 Mayo 2022 - 6:00PM
NEWSBTC
Bitcoin funding rates had taken a plunge at the beginning of May.
While this had not been a pronounced bear trend at that point, the
price of BTC was already showing some signs of weakness. That
weakness has now seen the digital asset plunge below $30,000 for
the first time in 2022 and back up. However, funding rates that had
returned to neutral had remained unmoved by this volatility in the
market. Bitcoin Funding Rates Are Unshaken Bitcoin had seen some
massive sell-offs around the $35,000 level. This was mainly
triggered by investors panicking that they may lose more of their
holdings and as such, had tried exiting the cryptocurrency to
mitigate these losses. The resultant fear and liquidations that had
erupted had worked together to push the price of the digital asset
even further down, and like clockwork, every other thing in the
market had followed this downtrend. Related Reading | Market
Downtrend Trigger Bitcoin Inflows From Institutional Investors
Funding rates would prove to be one of the few immune to this
downtrend. After recovering from its crash at the start of the
month, it had gone back to the neutral level and this is where it
stayed even as bitcoin had broken down below $35,000. Even when its
price had fallen lower, funding rates had remained unshaken.
Funding rates remain neutral | Source: Arcane Research This follows
the same trend that had been recorded since the December 4th crash.
Funding rates had started on a trend of being at or below neutral
and have not deviated from this since then. It was obviously the
result of negative sentiment across investors which had led to low
momentum. Another group that this is indicative of is the perp
traders. These perpetual traders have been following the spot
market closely. This is obviously a deviation from the norm because
as seen in previous market trends, the funding rates fall when the
price of the digital asset falls. BTC crumbles to $29,000 | Source:
BTCUSD on TradingView.com This indicates that these perp traders
are leaning towards adding more long exposure with the digital
asset. Mostly, this is happening near what is perceived to be the
bottom of the one-and-a-half-year trading range. Related
Reading | Shiba Inu Vs. Dogecoin And LUNA: Which One Will
Survive The Crypto Carnage? The average funding rate is pulled from
cryptocurrency exchanges Binance and Bybit, both of which have
proven to have the most presence from perp traders. Even though the
whole Terra UST issues, funding rates have refused to budge.
Featured image from The Economics Times, charts from Arcane
Research and TradingView.com
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