After the market sentiment resets, the Bitcoin financing interest rate drops below zero


Yesterday, as the price of Bitcoin fell after hitting a record high, market sentiment reset, and financing interest rates fell below zero.

Bitcoin financing interest rates briefly fell below zero yesterday

According to the latest weekly report Arcane Research, When BTC made a new ATH, the funding rate plummeted after soaring. Yesterday, they were briefly below zero.

this”Funding rate“Is a Bitcoin indicator that tells us the current periodic payments between futures contract traders.

When the indicator is positive, it means that long traders pay fees to short traders to maintain their positions. This situation shows that the current market sentiment is bullish.

On the other hand, the negative value of this indicator means that short traders have paid a premium for holding positions. This trend may mean that the current market sentiment is bearish.

Now, here is a chart showing how the value of Bitcoin financing interest rates has changed in the past few months:

Looks like the funding rates have plummeted recently | Source: The Arcane Research Weekly Update - Week 45

As shown in the graph above, when Bitcoin created a new ATH of approximately $69,000 earlier this month, the indicator also showed a significant increase.

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However, BTC was unable to maintain its upward momentum, and soon the price began to fall. The financing interest rate has subsequently fallen sharply.

Due to the fall in the price of Bitcoin, a long-term value of approximately US$500 million was observed on November 10th. Liquidation.

Many traders seem to be betting that the price of BTC will rise further after its new ATH, so they opened new leveraged long positions. But due to the crash, these positions were eventually liquidated.

On November 15th (yesterday), the value of this indicator briefly fell below zero. This is the first time since the end of September.

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Currently, the funding rate is slightly higher than zero. Since the demand for shorts and longs are equal, the market seems to have returned to balance.

However, with the latest downward trend of BTC, this balance may soon change.

Bitcoin price

At the time of writing, Bitcoin price The stock price is approximately US$60,900, which has fallen by 8% in the past 7 days. In the past thirty days, the value of cryptocurrencies has risen by 0.3%.

The chart below shows the trend of token prices in the past five days.

Bitcoin price chart

BTC has continued its decline as it plunges down in the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research



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