HomeNewsIs Bitcoin's Latest Comeback More Than Just a Dead-Cat Bounce?

Is Bitcoin’s Latest Comeback More Than Just a Dead-Cat Bounce?

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  • While still favorable, bitcoin funding rates haven’t overheated, indicating a steady market mood.
  • Strong institutional interest is shown by the whale purchase of 1,590 BTC from Binance recently.

The question of whether Bitcoin’s current comeback is a one-time blip or a long-term trend is raging in the cryptocurrency community. Futures market data and recent transactions can be analyzed to obtain understanding of the mood of the market and possible future changes.

Bitcoin Funding Rate

As per a CryptoQuant Quicktake article, the funding rate for Bitcoin has leveled off at a somewhat low level. The funding rate keeps track of the periodic fees that traders on the derivatives market pay one another. When the funding rate is positive, long-term contract holders are paying a premium, which is a bullish sign.

A negative funding rate suggests that short-term investors are in charge, which indicates a pessimistic mood. As of right now, Bitcoin’s financing rate has mainly stayed positive, in line with the asset’s recent increase.

Source: CryptoQuant

Because Bitcoin moves counter to what most people think, historically, a very positive financing rate has been a bearish sign for the price of the commodity.

Historical Statistics and Market Leaders

Overwhelmingly positive attitude at high funding rate values may indicate possible tops for Bitcoin. The March all-time high (ATH) coincided with a noteworthy increase in this statistic. But current statistics indicates a decline in mood.

Though they have sharply dropped, the funding rates are still positive. Much lower than the 3-4% recorded in March, the financing rate’s 7-day simple moving average (SMA) is currently around 0.45%. This implies that, even with Bitcoin’s comeback beyond $70,000, the sentiment hasn’t overheated.

Latest Whale Activity

As of right now, according to CoinMarketCap data, Bitcoin is valued at about $71,148.96, up 6.12% in the last day and 15.62% over the previous week.

Also, as previously reported by ETHNews, whale purchase of 1,590 BTC from Binance worth over $106.8 million demonstrates the strong institutional interest in and confidence in Bitcoin’s ongoing growth.

Funding rates were higher in earlier dead-cat bounce scenarios, including those in March 2021 when rates were almost 3% before a drop to $30,000 and in November 2021 when rates were between 0.7% and 0.8% before the 2022 bad market.

Lower funding rates and large institutional purchases in the present market indicate a more steady and maybe long-lasting rebound for Bitcoin.

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Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628