Analyzing Bitcoins [BTC] unprecedented rally and market reaction
- BTC has experienced an unprecedented rally, with the crypto market largely following suit.
- However, traders’ reactions have been mixed, with negative sentiment rising and modest improvements in funding rates.
Bitcoin [BTC] has been on an unprecedented upward trajectory recently, and the entire crypto market has followed suit, or at least to a large extent. While a price increase is welcome news, restoring investor confidence is another matter entirely. These measures reveal traders’ reactions to the press time price movement.
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Negative market sentiment is increasing
According to Santiment, the buzz around Bitcoin and other asset prices has not yet translated into increased activity in the community. The chart showed a disturbing trend; the number of terms expressing negative feelings increased, which quickly closed the gap with positive ones.
🤔 Even with #crypto have a great week, the amount of discussions seems to be down. More importantly, keywords with negative sentiment close the gap to positive keywords. Historically, prices rise most often in times of #FUD and unbelief. pic.twitter.com/etiEOOeSLD
— Santiment (@santimentfeed) March 20, 2023
While this upward trend is certainly cause for concern, it is important to remember that historically, prices and the crypto market have always risen during times of fear, uncertainty and doubt (FUD). This suggests that the value of crypto assets may rise, despite the widespread skepticism among investors.
Funding rates return weekly average positive
The past week had the third lowest weekly funding rates for BTC, according to data from CryptoQuant. COVID and FTX respectively caused the previous crashes. High negative financing rates are often an indication of a short squeeze.
Spot purchases led to price falls before the futures market entered with intensity in all three cases. The current rate is positive but modest, suggesting market neutrality with a slight preponderance of optimism among traders of these perpetual contracts.
Source: CryptoQuant
Crypto markets increase as Bitcoin increases
CoinMarketCap’s data also indicated an uptick in the cryptocurrency market. The overall value of all cryptocurrencies fell in early March due to the downward price trend.
How much is 1,10,100 BTC worth today?
As of this writing, however, its market cap has risen above $1 trillion and continues to rise. It has risen to over $1.1 trillion, with a 24-hour volume of nearly $77 billion at press time.
Source: CoinMarketCap
Indicators showed investors were still watching closely to see if the latest rally would last. This explains why there have been only modest improvements in the funding rate, and negative keywords have persisted. But if the market continues its recent streak, that could soon change.
