spot_img
Monday, December 5, 2022
More
    HomeBitcoinBitcoin Funding Rates At 6-Month High, Long Squeeze Alert?

    Bitcoin Funding Rates At 6-Month High, Long Squeeze Alert?

    -


    On-chain knowledge exhibits the Bitcoin funding charges have now hit a 6-month excessive, one thing that would result in an extended squeeze available in the market.

    Bitcoin Funding Charges At present Have A Extremely Constructive Worth

    As identified by an analyst in a CryptoQuant post, BTC funding charges have surged as much as the best for the final six months.

    The “funding rate” is an indicator that measures the periodic payment that merchants within the Bitcoin futures market must pay one another.

    When the worth of this metric is bigger than zero, it means lengthy merchants are paying shorts to carry onto their positions proper now. Such a development exhibits a bullish sentiment is extra dominant available in the market presently.

    Alternatively, the funding price being constructive suggests there are extra shorts available in the market in the meanwhile as they’re paying a payment to the longs.

    Now, here’s a chart that exhibits the development within the Bitcoin funding charges over the yr 2022 to date:

    Bitcoin Funding Rates

    The worth of the metric appears to have spiked up over the previous day | Supply: CryptoQuant

    As you may see within the above graph, the Bitcoin funding price is constructive proper now, and has been on the rise in current days.

    Throughout the previous day, the indicator has hit its highest worth for the final six months, suggesting there are a considerable amount of longs open within the futures market proper now.

    The final time such excessive values of the metric had been noticed was again in Could, shortly after which the value of the crypto crashed from almost $40k all the way in which all the way down to $30k.

    A “long squeeze” befell available in the market then. A squeeze is an occasion the place a considerable amount of speedy liquidations happen in an overleveraged surroundings.

    In an extended squeeze, a pointy swing downwards within the value (when funding charges are constructive) liquidates numerous lengthy contracts, which solely amplifies this downswing additional.

    This amplified plunge then liquidates much more contracts, and so forth. On this manner, liquidations can cascade collectively and make the value take a pointy plummet.

    Because the Bitcoin funding charges are at excessive constructive values presently, an extended squeeze is a risk, provided that the value observes a pointy sufficient lower.

    BTC Worth

    On the time of writing, Bitcoin’s price floats round $20.7k, up 1% within the final week.

    Bitcoin Price Chart

    Seems like the worth of the crypto has taken a success over the past 24 hours | Supply: BTCUSD on TradingView
    Featured picture from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com



    Source link

    Related articles

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    spot_img

    Latest posts