Two weeks ago, bitcoin funding rates were below neutral after finally emerging from a downtrend lasting a month. Fears of a new bearish market trend were triggered by this. The numbers from the last week show that this is not true. The bitcoin funding rates show a brighter picture of the digital asset.
Funding Rates Return To Neutral
The Bitcoin funding rates have been much more optimistic than in previous weeks. It was because the funding rate had maintained its neutral status for seven consecutive days. There wasn’t a single time in the week when it fell below neutral. It is now the first week in a row that funding rates have remained at or above neutral for the whole of March.
A recovery in funding rates is always a welcome change for the market, this is why last week’s day remains important. In a market like this where bitcoin is struggling to break the $23,000 mark, it’s important to see a substantial change not just in sentiment, but also in how much money is being invested into the space.
BTC funding rates are back to neutral Source: Arcane Research| Source: Arcane Research
It is now on the path to becoming neutral again, after its funding rates have returned to neutral. This has been elusive for bitcoin most of this year. Although the trend has stabilized since June, it is still possible to find positive rates in order to maintain a bullish rally.
BTC trading under $23,000| Source: BTCUSD on TradingView.com
Bitcoin to Recover
Bitcoin continues to trend at $22,800 which is surprising considering it has now become a support level. While this level remains stable, the market needs to move quickly to break out of it. The recovery in funding rates may give perp traders the push they need.
Read Related Article: Why Bitcoin Investors Need To Pay Attention To the Macro Environment
Leverage in bitcoin markets remains high. It means more bitcoin traders open positions. However, this puts traders in an extremely precarious situation. Liquidations can quickly mount, particularly if the price is below $22,000.
However, bull indicators still remain strong, although they are a bit less than last week. Bears are not likely to be able to overcome the resistance of $23,000, so they will need to push for $23,500 as their next major resistance. It is possible that bitcoin will surpass $24,000 if it can break the 50-day moving median once again.
Featured Image from The Economic Times. Arcane Reseach charts and TradingView.com charts.
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