Bitcoin funding rate flips negative after $48K retest — Was it a bear trap?
Bitcoin price is more than 20% away from its all-time high, but the current negative funding rate on BTC futures might give bulls a unique advantage. As Bitcoin (BTC) lost the $52,000 support on April 22, the futures contracts funding rate entered negative terrain. This uncommon situation causes the shorts, investors betting on price downside, to pay fees every eight hours.While the rate itself is mildly damaging, this situation creates incentives for arbitrage desks and market makers to buy perpetual contracts (inverse swaps) while simultaneously selling the future monthly contracts. The....
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Bitcoin has undergone a strong drop since the highs seen yesterday. The price of the leading cryptocurrency fell from its highs of $13,850 to lows around $12,900. This drop was seemingly a result of the drop in the U.S. stock market. The Dow Jones and the S&P 500 have dropped the largest they have in […]
Celebrity traders on Twitter frequently cite negative funding rates as a Bitcoin buy signal, but does data support this point of view? Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. This fee ensures there are no exchange risk imbalances. Even though buyers' and sellers' open interest is matched at all times, leverage can vary, and when buyers (longs) are demanding more leverage, the funding rate turns positive. Thus, they are the ones paying the fees to the sellers (shorts).However, the opposite situation occurs when shorts....
The price of Bitcoin (BTC) surged past $14,000 for the second time in one week. Yet, the funding rate of BTC futures on Binance Futures is still heavily negative. The daily price chart of Bitcoin. source: BTCUSD on TradingView.com Why is Funding Rate Critical For Bitcoin Momentum? The Bitcoin futures market utilizes a system known […]
An ascending triangle setup promises major price rebound in the Ethereum price in 2022. Ethereum's native token, Ether (ETH), continues to face downside risks in a higher interest rate environment. But one analyst believes that the token's next selloff move could turn into a bear trap as the market factors in the possible release of the Merge this coming August.ETH to $4K?Ether's price could reach $4,000 by 2022's end, according to a technical setup shared on May 20 by Wolf, an independent market analyst.The analyst envisioned ETH moving inside a multi-month ascending triangle pattern,....
Intended to convince market participants of a price correction, bear traps are orchestrated by entities with large holdings to make quick profits. How to identify and avoid a bear trap?As a difficult proposition for novice traders, a bear trap can be recognized by using charting tools available on most trading platforms and demands caution to be exercised.In most cases, identifying a bear trap requires the use of trading indicators and technical analysis tools such as RSI, Fibonacci levels, and volume indicators, and they are likely to confirm whether the trend reversal after a period of....