Bitcoin funding rates remain positive as bullish sentiment continues
On-chain data shows that Bitcoin funding rates have remained positive recently as the crypto price has continued to recover.
Bitcoin funding rates have been largely positive over the past month
As pointed out by an analyst in a CryptoQuant post, BTC funding rates have been in the green recently, but not as positive as back between July 18th and 22nd yet.
The “funding rate” is an indicator that measures the periodic fee that traders of perpetual futures contracts pay each other.
When the value of this metric is greater than zero, it means that long traders are paying a premium to short traders right now to hold their positions. Such values indicate that a bullish sentiment is more dominant in the market at the moment.
On the other hand, negative values on the indicator suggest that the number of shorts is overwhelmingly greater than that of longs right now. This type of trend naturally suggests that the majority sentiment is currently bearish.
Now, here’s a chart showing the trend in Bitcoin funding rates over the past couple of months:
The value of the metric seems to have been above the zero mark in recent days | Source: CryptoQuant
As you can see in the graph above, Bitcoin funding rates have been positive for quite some time now, with a few spikes down into the red region.
This shows that longs have been the most dominant force in the futures market in recent weeks. This trend makes sense as green funding rates typically follow during periods of rising prices, while negative prices appear during downtrends when longs are liquidated.
The quant from the post notes that the few red tops that have been observed recently have proven to be reliable buy points ever since the crypto first hit $24k again.
The analyst believes Bitcoin could possibly have further room to grow still, as funding rates have been quite positive recently, but they are still not as green as between 18-22. July. At the time, the value of BTC reached a local peak above $24k.
BTC price
At the time of writing, Bitcoin’s price is hovering around $24.2k, up 1% in the last week. Over the past month, the crypto has increased by 18% in value.
The chart below shows the trend in the price of the coin over the last five days.
Looks like the price of the coin has been moving sideways in the last few days | Source: BTCUSD on TradingView
Featured image from Mariia Shalabaieva on Unsplash.com, charts from TradingView.com, CryptoQuant.com
