Bitcoin Decline Sees Funding Rates Plunge To Three-Month Lows
09 Junio 2022 - 12:00PM
NEWSBTC
Bitcoin funding rates have taken a nosedive after massive sell-offs
at the beginning of the week. Bitcoin had made a remarkable
recovery coming out of a slow weekend but these sell-offs would
quickly wipe off all of the gains made, and with it, the funding
rates came crashing down. It led to one of the most brutal crashes
in funding rates in recent history. This has seen it touch one of
its lowest points since February. Factors Behind Decline The
bitcoin funding rates had plummeted due to the sell-offs that were
recorded on Monday night. Most notably had been the plunge in
crypto exchange Bybit which had declined to its three-month low of
-0.0378%. It represented one of the largest declines of all
cryptocurrency exchanges, of which Binance’s levels had stopped at
0.01378%. This sent funding rates to February 2nd levels, although
stopping at a higher low compared to the carnage witnessed on May
12th. Related Reading | Bitcoin Miner Revenues Stay Low As
Price Decline Continues These negative funding rates persisted
throughout the week before culminating in the June decline. Bybit
and Binance have both seen negative rates due to the lagging on the
perpetual spot markets. It shows a high correlation to the price of
the digital asset which had fallen back below $31,000 on Monday
night to land at $29,000. BTC funding rates see sharp decline |
Source: Arcane Research Funding rates on the Binance exchange have
now been at the neutral to negative levels for half a year now.
This is a new record for the exchange after enjoying some of the
best months in the year 2021. The funding rates overall have been
in the neutral to below neutral levels for the better part of 2022
and this does not seem to be changing anytime soon. Bitcoin Trend
After Decline The decline in the funding rates coincided with the
decline in the price of the digital asset. Bitcoin which had been
making steady gains had lost all of it on Monday and returned to
the $29,000. However, this would not hold for long as the digital
asset would start a reversal that would put it back above $30,000
by the end of Wednesday. BTC settles above $30,000 | Source: BTCUSD
on TradingView.com This recovery is also credited to the fact that
investors are returning back to BTC to seek safe haven. Altcoins
had been the winners of the 2021 bull rallies but with the 2022
bear market had come massive losses and as such, investors had
moved on to strong digital assets such as bitcoin. Related
Reading | U.S. Macro Pressure Responsible For Entire Bitcoin
Downtrend With this, bitcoin is now trading above its 20-day moving
average but continues to lie below its 50-day moving average. This
indicates that bears still largely maintain their hold on the
market but a turn in the tide may be coming if there is significant
buy pressure in the market. Bitcoin is trading at $30,475 at
the time of this writing. It is maintaining its recovery trend in
the early hours of Thursday. However, with the opening of the U.S.
trading hours, more sell-offs are expected, leading to a decline in
price. Featured image from PYMNTS, charts from Arcane Research and
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