On-chain data shows the Bitcoin funding rates have remained at positive values recently as the crypto’s price has continued its recovery.
Bitcoin Funding Rates have been Mostly Positive in the Past Month
An analyst pointed out in CryptoQuant that the BTC funding rates are green, although not as optimistic as they were back July 18th through 22nd.
The “funding rate” is an indicator that measures the periodic fee that perpetual futures contract traders are paying each other.
If this value is higher than zero it indicates that long traders pay a premium right now to short traders in order to keep their positions. This value indicates that bullish sentiment is stronger in the market.
However, the indicator’s negative value indicates that there are more shorts than longs. This type of trend suggests that majority sentiment is bearish right now.
Below is a chart showing how Bitcoin funding rates have changed over the past few months.
Recent days have seen the value of this metric rise above zero. Source: CryptoQuant| Source: CryptoQuant
You can see that Bitcoin funding rates have been stable for quite some time, although there were a few dips into the negative.
The last weeks have seen longs dominate the futures markets. This is because green funding rates are more common during periods of rising prices. Negative rates tend to appear in downtrends when longs become liquidated.
A quant in the post noted that the red spikes observed lately have proved to be reliable buying points, ever since the cryptocurrency first reached $24k.
Analysts believe Bitcoin has potential to expand further, as although funding rates for Bitcoin have been positive in recent months, they still aren’t as green as those between 18-22 Jul. The local peak of BTC was $24k back then.
BTC price
At the time of writing, Bitcoin’s price floats around $24.2k, up 1% in the last week. In the last month, crypto gained 18%.
Below chart displays the trends in the value of the coin during the past 5 days.
The price of Bitcoin has moved sideways over the last days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Image by Mariia Shalabaieva, Charts from TradingView.com and CryptoQuant.com