The price of bitcoin was somewhat slow in the last days of April before relaunching life to start the new month of May. The first cryptocurrency has since returned nearly $ 98,000, flirting with the very coveted level of $ 100,000 to launch the weekend.
Since the loss of the price bar of $ 100,000 in early February, the BTC has struggled to perform a major positive race in the last three months. The latest chain data suggest that the dream of recovering a six -digit assessment could really be on, the price of Bitcoin seeking to resume its bull race.
What negative financing rates mean for the price of the BTC?
In a recent post Quicktake on the cryptocurrency platform, the AMR Taha chain analyst revealed that Bitcoin’s financing rates on Binance have experienced a significant drop in recent days. The indicator of the “financing rate” is a metric which measures the periodic costs exchanged between traders on the derivative market (perpetual term contracts).
A high or positive financing rate indicates that long traders (investors with purchase stations) pay costs to open traders (investors with sales stations). This periodic payment management generally indicates a dominant bullish feeling on this particular market.
On the other hand, when the funding rate metric has a negative value, this implies that investors with short -term positions pay merchants with purchase positions on the derivative market. This financing rate trend notes that the market is dominated by the Bears.
Source: CryptoQuant
According to cryptocurrency data, the Bitcoin financing rate on Binance, the largest crypto exchange in the world in volume of negotiation, fell into a deeply negative territory around -0,0008%. This evolution reflects a significant change in the current feeling and dynamics of the market.
In their Quicktake post, Taha awarded the recent drop in the funding rate for aggressive sales by Bitcoin retail merchants. The chain analyst then correlated the sales pressure in fear between market players rather than “fundamental weakness”.
Taha noted that when financing rates become too negative, the Bitcoin market often becomes sensitive to short pressure, where short traders are obliged to cover their positions due to the rise in prices – feeding another movement upwards. In addition, extremely low financing rates have been historically correlated with local price lows, which preceded the reort trend reversals.
Bitcoin Price at a glance
To date, the price of the BTC amounts to around $ 96,950, reflecting an increase of 2% in the last 24 hours. Suppose that the recent upward impulse of the BTC and the last chain observation are all that is to be passed, there is a good chance that the first cryptocurrency to make a return above $ 100,000 this weekend.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Istock star image, tradingview graphic
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