Bitcoin Funding Rates Turn Negative For The First Time Since Late September
As per the latest weekly report from , market sentiment reset after the latest crash in BTC’s price as funding rates turned negative.The “perpetual funding rate” is an indicator that measures the periodic fee that Bitcoin futures traders have to pay each other to keep their positions. This metric helps us know about which direction leveraged positions tend to.
Looks like the funding rates dipped to negative recently | Source:As you can see in the above graph, the funding rates have been positive for many months now, but following the crash they have turned negative.
Related Reading | Understanding Bitcoin UTXO: Mid-To-Long Term Holders Responsible For November Correction
These long liquidations resulted in the open interest being flushed of $5.4 billion in futures contracts. And subsequently, the funding rates declined to around -0.035%.
While this is the first time since late September that the funding rates have turned negative, such highly negative values were only seen back in July.Related Reading | Data Shows Bitcoin Short-Term Holders Have Started To Sell At A Loss
This flip to negative means that the Bitcoin market sentiment has now been reset.BTC Price
At the time of writing, Bitcoin’s price floats around $51.3k, down 12% in the last seven days. Over the past month, the crypto has lost 16% in value.
The below chart shows the trend in the price of the crypto over the last five days.BTC's price recovers a bit from the crash in the past 24 hours | Source:A few days back, Bitcoin’s price crashed down to $42k. Quickly after, it recovered a bit to higher levels, and then consolidated for a couple of days. In the past day, the coin has shown some recovery as it has once again broke above $51k.
Featured image from Unsplash.com, charts from TradingView.com, Glassnode