On-chain data shows the Bitcoin funding rates have now hit a 6-month high, something that could lead to a long squeeze in the market.<\/p>\n
As pointed out by an analyst in a CryptoQuant post<\/a>, BTC funding rates have surged up to the highest for the last six months.<\/p>\n The \u201cfunding rate<\/a>\u201d is an indicator that measures the periodic fee that traders in the Bitcoin futures market have to pay each other.<\/p>\n When the value of this metric is greater than zero, it means long traders are paying shorts to hold onto their positions right now. Such a trend shows a bullish sentiment is more dominant in the market currently.<\/p>\n On the other hand, the funding rate being positive suggests there are more shorts in the market at the moment as they are paying a fee to the longs.<\/p>\n Now, here is a chart that shows the trend in the Bitcoin funding rates over the year 2022 so far:<\/p>\n\n The value of the metric seems to have spiked up over the past day | Source: CryptoQuant<\/a><\/p>\n As you can see in the above graph, the Bitcoin funding rate is positive right now, and has been on the rise in recent days.<\/p>\n During the past day, the indicator has hit its highest value for the last six months, suggesting there are a large amount of longs open in the futures market right now.<\/p>\n The last time such high values of the metric were observed was back in May, shortly after which the price of the crypto crashed from nearly $40k all the way down to $30k.<\/p>\n A \u201clong squeeze<\/a>\u201d took place in the market then. A squeeze is an event where a large amount of rapid liquidations take place in an overleveraged environment.<\/p>\n In a long squeeze, a sharp swing downwards in the price (when funding rates are positive) liquidates a large number of long contracts, which only amplifies this downswing further.<\/p>\n This amplified plunge then liquidates even more contracts, and so on. In this way, liquidations can cascade together and make the price take a sharp plummet.<\/p>\n As the Bitcoin funding rates are at high positive values currently, a long squeeze is a possibility, given that the price observes a sharp enough decrease.<\/p>\n At the time of writing, Bitcoin\u2019s price<\/a> floats around $20.7k, up 1% in the last week.<\/p>\n\n Looks like the value of the crypto has taken a hit during the last 24 hours | Source: BTCUSD on TradingView<\/a> <\/p>\n On-chain data shows the Bitcoin funding rates have now hit a 6-month high, something that could lead to a long squeeze in the market.<\/p>\n As pointed out by an analyst in a CryptoQuant post<\/a>, BTC funding rates have surged up to the highest for the last six months.<\/p>\n The \u201cfunding rate<\/a>\u201d is an indicator that measures the periodic fee that traders in the Bitcoin futures market have to pay each other.<\/p>\n When the value of this metric is greater than zero, it means long traders are paying shorts to hold onto their positions right now. Such a trend shows a bullish sentiment is more dominant in the market currently.<\/p>\n On the other hand, the funding rate being positive suggests there are more shorts in the market at the moment as they are paying a fee to the longs.<\/p>\n Now, here is a chart that shows the trend in the Bitcoin funding rates over the year 2022 so far:<\/p>\n The value of the metric seems to have spiked up over the past day | Source: CryptoQuant<\/a><\/p>\n As you can see in the above graph, the Bitcoin funding rate is positive right now, and has been on the rise in recent days.<\/p>\n During the past day, the indicator has hit its highest value for the last six months, suggesting there are a large amount of longs open in the futures market right now.<\/p>\n The last time such high values of the metric were observed was back in May, shortly after which the price of the crypto crashed from nearly $40k all the way down to $30k.<\/p>\n A \u201clong squeeze<\/a>\u201d took place in the market then. A squeeze is an event where a large amount of rapid liquidations take place in an overleveraged environment.<\/p>\n In a long squeeze, a sharp swing downwards in the price (when funding rates are positive) liquidates a large number of long contracts, which only amplifies this downswing further.<\/p>\n This amplified plunge then liquidates even more contracts, and so on. In this way, liquidations can cascade together and make the price take a sharp plummet.<\/p>\n As the Bitcoin funding rates are at high positive values currently, a long squeeze is a possibility, given that the price observes a sharp enough decrease.<\/p>\n At the time of writing, Bitcoin\u2019s price<\/a> floats around $20.7k, up 1% in the last week.<\/p>\nBTC Price<\/h2>\n
\nFeatured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/p>","protected":false},"excerpt":{"rendered":"Bitcoin Funding Rates Currently Have A Highly Positive Value<\/h2>\n
BTC Price<\/h2>\n