Bitcoin Exhausted: Funding Rates Look Pessimistic for Analysts
Bitcoin (BTC) funding rates, i.e., the fees of crypto derivatives exchanges required to keep the balance between spot and futures prices, are shrinking. This might be a disturbing signal for Bitcoin (BTC) bulls, the CryptoQuant community author says.
Bitcoin funding rates declined significantly: What does this mean?
As Bitcoin (BTC), the largest cryptocurrency, was brutally rejected over $100,000, its derivatives market started showing signs of exhausted demand. Exchange funding rates for BTCUSDT contracts face significant decline, CryptoQuant's community analyst @ShayanBTC said in his latest QuickTake post.
Previous "rejection" close to $108,000 was the most painful for this indicator, the analyst noticed. As such, centralized cryptocurrency exchanges are reducing funding rates since fewer traders are opening Bitcoin (BTC) positions.
This trend showcases reduced commitment from traders on the derivatives market, which leads to insufficient support for maintaining the uptrend, the analyst concludes.
More pain might be ahead for Bitcoiners (BTC) once the largest cryptocurrency fails to hold above $90,000. Bitcoin (BTC) might even test lower Fibonacci levels in future downtrends.
Vladislav SopovAs covered by U.Today previously, Bitcoin (BTC) dropped from $102,000 to $95,200 today. In a broader decline, the entire crypto market lost 8.3% of its capitalization, with meme coins being the worst sufferers.
Bitcoin RSI already targets oversold zones
Funding rates should be considered as fees exchanges charge derivatives traders with. Normally associated with perpetual contracts, the funding rate declines together with lowered demand for this or that asset.
However, the Relative Strength Indicator of the trading sentiment looks much more optimistic for Bitcoin (BTC). In recent days, it dropped from the mid-70s to almost 35 points, which is the upper level for the "oversold" zone.
When Bitcoin (BTC) was trading above $100,000, this major tech analysis indicator was demonstrating that the orange coin was clearly overbought.
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