Bullish Bitcoins funding rates rise again – $60k tangible
Bitcoin is currently breaking down again after its overnight rise to $57,700 though. However, on-chain data for funding rates show a different picture: According to this, traders are rushing into Bitcoin again.
Funding rates are an indicator of increased trading activity. Perpetual swap products allow traders to borrow more Bitcoin System money than they hold (a process called leverage) to place larger bids for more profits while risking a smaller amount of capital.
The excess funds are provided by the exchanges, which in turn charge traders interest for allowing them to do so. High, positive funding rates mean that traders are willing to pay large amounts as interest to place bids, while negative rates mean that exchanges are willing to pay the trader to borrow from them.
„Funding has started to warm up again. Not exactly February levels, but still a notable jump,“ commented Lex Moskovski, founder of crypto fund Moskovski Capital, citing Glassnode data. „People are getting increasingly bullish,“ he adds.
As the tweet shows, funding rates for perpetual futures products (financial instruments that track Bitcoin or other cryptocurrencies and have no „expiry date“) reached levels last seen in mid-February – just before Bitcoin began its run to an all-time high of over $58,500.
Prices are averaging 0.06% as we go to press – or levels last seen on 22 February, when Bitcoin began dumping after its ATH. They reached above 0.14% on 8 February, corrected to below 0.05% by 10 February before remaining in the 0.06-0.12% range for a while.
Fund manager: „Buy bitcoin dips at $40,000“.
While prices suggest a rising price action, a partner at a Hong Kong-based trading firm says another big dip could occur.
Annabelle Huang, a partner at Amber Group, believes the $40,000 price level is cheap to buy bitcoins in the event of a market correction (to buy bitcoin cheap platform comparison).
„We note that 40-43k were the preferred levels to buy the short-term dip. BTC has reclaimed the 50k mark after the US passed the stimulus package, and on the back of MicroStrategy and Meitu buying BTC.“
„However, concerns from the macro world around interest rates and the DXY have sent stocks down across the board, threatening crypto again.“
According to Huang, there has been a recent surge of interest from institutional players around the world, while in China, many high-network individuals are additionally inquiring about how to buy bitcoin.
Even Chinese companies are betting big. Meitu, a Hong Kong-listed photo editing app, raised over $17 million in Bitcoin and $22 million in Ethereum last week, becoming the first Chinese company to do so.