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The price of Bitcoin picked up this week from where it left off in the previous week, forging successive all-time highs in the past seven-day span. Over the last few days, the big question on everyone’s mind has been — when will the premier cryptocurrency surpass the $100,000 level?
While most investors are worried about a short-term target, some market participants are more concerned about the long-term prospects of the world’s largest cryptocurrency. According to the latest on-chain data, it appears that the price of Bitcoin could see a shakeout sooner than expected. Will The Rising Bullish Sentiment Sustain The Rally?
According to market intelligence platform IntoTheBlock, the Bitcoin funding rates have witnessed a notable upswing in recent days. The relevant indicator here is the “funding rate” metric, which tracks the periodic fee exchanged between traders in the derivatives (perpetual futures) market. Related Reading Cardano Gains Steam: ADA Sights More Growth After Breaking $0.8119 21 hours ago
When the funding rate is high or positive, it implies that the long traders are paying traders with short positions. Typically, this direction of the periodic payment suggests a strong bullish sentiment in the market.
On the other hand, a negative value of the funding rate metric means that investors with short positions are paying traders with buy positions in the derivatives market. This trend suggests that the market is shrouded by a bearish sentiment. Source: IntoTheBlock/X
Data from IntoTheBlock shows that the Bitcoin funding fees for perpetual swaps have increased by more than 10% — and up to 20% on major trading platforms. However, the on-chain firm noted that this continuous funding rate growth could hint at speculative overheating, potentially resulting in market corrections.
According to IntoTheBlock, one of the possible catalysts of this bullish sentiment is the United States government’s approach to crypto under Donald Trump. With the “strategic Bitcoin reserves” more of a possibility under the incoming US president, investors are banking on Bitcoin surpassing a six-figure valuation.
As of this writing, the flagship cryptocurrency is valued at around $98,400, reflecting a 1% increase in the past 24 hours. Bitcoin Perpetual Futures Market Remains Restrained — What It Means
In a recent post on the X platform, Glassnode revealed that the Bitcoin perpetual futures market “remains restrained.” This suggests that several traders are still approaching the market with caution despite the steady price climb of BTC in recent weeks. Related Reading Dogecoin Price Set To Skyrocket By Saturday, Warns Crypto Analyst 1 day ago
Data from Glassnode shows that the Bitcoin funding rates are just above 0.01%, which falls short of the March 2024 level (~0.07%) when the BTC price reached a local top. Ultimately, this suggests that there is still room for growth in the value of the premier cryptocurrency. The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView Featured image from iStock, chart from TradingView