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On-chain knowledge reveals the Bitcoin funding fee remains to be at a comparatively excessive optimistic worth, suggesting that the crypto may see extra decline within the close to time period.
Bitcoin Funding Price Has Been At A Optimistic Worth Throughout The Final Few Days
As identified by an analyst in a CryptoQuant submit, the present funding fee means that the worth is in a brand new decline proper now.
The “funding fee” is an indicator that measures the periodic payment that merchants within the Bitcoin futures market must pay one another.
When the worth of this metric is above zero, it means lengthy merchants are at the moment paying a premium to the brief merchants to maintain their positions. Such values point out {that a} bullish sentiment is extra dominant out there in the mean time.
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Then again, adverse values of the indicator suggest the bulk sentiment is bearish proper now as shorts are paying longs at the moment.
Now, here’s a chart that reveals the pattern within the Bitcoin funding charges during the last six months:
The worth of the metric appears to have been optimistic previously week | Supply: CryptoQuant
As you’ll be able to see within the above graph, every time the Bitcoin funding fee has reached a comparatively excessive optimistic worth throughout the previous couple of months, the worth of the crypto has usually noticed a decline not too lengthy after. Equally, adverse spikes have resulted within the worth of BTC seeing some uptrend.
Right here’s what’s happening right here: excessive optimistic values imply longs are piling up out there. So, a big sufficient sudden decline can liquidate quite a lot of these, which might find yourself driving the worth additional down, and thus liquidating much more lengthy positions. Such an occasion the place liquidations cascade collectively known as a “squeeze” (or on this case, an extended squeeze).
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Just a few days again, when the worth of the crypto was above $23k, the funding fee once more made a optimistic peak and the worth subsequently went down. Nonetheless, the present worth of the indicator nonetheless appears to be fairly optimistic, which can imply the decline remains to be ongoing.
BTC Value
On the time of writing, Bitcoin’s value floats round $22.7k, up 6% within the final seven days. Over the previous month, the crypto has gained 8% in worth.
The under chart reveals the pattern within the value of the coin during the last 5 days.
Seems to be like the worth of the crypto has been sliding down over the previous couple of days | Supply: BTCUSD on TradingView
Featured picture from Brent Jones on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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