BTC may not have the basis for a long-term decline at this stage
If this bull market can be "fully developed" (that is, hit the upper rail), then we may be lucky enough to see 300,000-500,000 BTC in the next 1-2 years.
JinseFinanceLog in/ Sign up
Analyst: Two key indicators are suggesting that BTC prices may rise
Follow
Author: Ciaran Lyons, CoinTelegraph; Compiler: Tao Zhu, Golden Finance
A cryptocurrency analyst said that two key Bitcoin trading indicators - the funding rate and the 3-month annualized basis rate - may indicate that prices will soon rise.
Will Clemente, co-founder of Reflexivity Research, wrote in a May 7 X post: "It looks like we are consolidating before the next wave of increases." He explained that Bitcoin's funding rate and basis rate have "cooled down" after briefly reaching negative values.
Bitcoin’s funding rate fell into negative territory several times in April. Source: Will Clemente
Bitcoin’s funding rate is often used to track overall trader sentiment in the cryptocurrency market. Exchanges use this rate to balance traders entering long positions with those choosing short positions to mitigate the risk of overexposure.
When long traders are more dominant, the funding rate is positive, indicating their confidence in a rise in Bitcoin’s price.
According to CoinGlass, as of this writing, the OI-weighted funding rate is 0.0091%, having recovered from a negative rate of -0.0050% on May 4.
“Sounds like the calm before the storm,” said anonymous crypto commentator Crypto Empire.
“The fact that the Bitcoin funding rate remains this low while Bitcoin is rebounding makes me feel very optimistic,” anonymous crypto trader Mister Crypto responded to their 98,000 X followers.
The change in funding rates over the four-day period was also reflected in the slight rise in Bitcoin’s price, which rose 1.11% to $62,361, according to CoinMarketCap.
However, liquidation data contradicts this, indicating that futures traders are still biased towards the bearish side and expect lower prices in the near term.
A 3.5% increase in prices to the key $65,000 level could liquidate $1.36 billion in short positions, while conversely, a 3.5% drop in prices to $60,500 would eliminate only $650 million in long positions.
Bitcoin 3-month annualized benchmark rate. Source: Will Clemente
At the same time, some traders also pointed out that the annualized basis of Bitcoin on major exchanges such as Binance, OKX and Deribit has risen to the high end of the neutral range of 5-10%.
The annualized basis rate is a measure of the difference in cost between a Bitcoin futures contract and the actual price of Bitcoin.
Traders typically view rates above 10% as neutral to bullish.
Gain a broader understanding of the crypto industry through informative reports, and engage in in-depth discussions with other like-minded authors and readers. You are welcome to join us in our growing Coinlive community:https://t.me/CoinliveSG
Add Comment
LoginLeave your comments
0 Comments
Earliest
Load more comments
More news about btc 3 month annualized basis
- Donald Trump lost $3 million in crypto last monthBullishBearish
- Number of active USDT addresses reaches 3-month highBullishBearish
- Weekend Watch: ETH Skyrockets to 3-Month High Against BTCBullish2Bearish
More news about btc 3 month annualized basis
- JinseFinance
Stablecoin annualized rate reaches 27%: How sustainable is Ethena Labs?
On February 16, Ethena Labs, the developer of Ethereum-based stablecoin USDe, completed a US$14 million strategic round of financing at a valuation of US$300 million.
JinseFinanceFed Raises Rates Another 75 Basis Points
The Fed raised raising interest rates by another three-fourths of a percentage point and pushing borrowing costs to the highest level since the Great Recession.
OthersEthereum Mining Revenue Soars to 3-Month High in Last Full Month of PoW
BeincryptoZipmex gets 3 month protection in Singapore amid halted withdrawals
Troubled crypto exchange Zipmex has time to come up with a restructuring plan by Dec. 2 after halting withdrawals in July.
CointelegraphBTC mining stocks double in a month as production ramps
While Bitcoin and Ethereum prices may have climbed lately, Bitcoin mining companies have been absolutely pumping.
CointelegraphMicroStrategy stock MSTR hits 3-month high after CEO's exit
Poor earnings coupled with overvalued fundamental metrics pose long-term bearish risks for MSTR.
CointelegraphTerra's ex-employees are shocked: Do Kwon is the driving force behind the failed stablecoin project Basis Cash
Intrigued by the early ideas behind Basis, Do Kwon appointed a group of employees to "resurrect" Basecoin, eventually creating Basis Cash, seeing it as a way to test the core concept of an algorithmic stablecoin.
FtftxBitcoin whales exit market as exchange inflows hit 3-month high
According to data from Glassnode, the bitcoin market appears to be retracing gains from January, as whales may be exiting and selling bitcoin on centralized exchanges.
CointelegraphBitcoin whales jumping ship as exchange inflows reach 3-month high
The Bitcoin market appears to be retracing the gains it has made since January as whales may be exiting and selling on centralized exchanges according to Glassnode.
Cointelegraph