Bitcoin Funding Rates Fall Below Zero In Market Sentiment Reset

Yesterday, financial indices fell below zero in market sentiment resumed as the price of Bitcoin declined after its new all-time high.

Bitcoin Consolidation Rate Briefly Fell Below Zero Yesterday

According to the latest weekly report from Arc Research, the financial indexes fell after a puncture around when BTC made a new ATH. Yesterday, they briefly went below zero.

The “financial index” is a Bitcoin indicator that tells us about the current periodic payments that future contract traders are making to each other.

When the metric has positive values, it means that long traders pay short traders to maintain their positions. Such a situation suggests that the market sentiment is currently bullish.

On the other hand, negative values ​​of the indicator imply that short traders pay a premium to hold their positions. This trend may mean that the market sentiment is bearish at the moment.

Now, here is a chart that shows how the value of the Bitcoin financial index has changed in the past two months:

Looks like the funding rates have plummeted recently | Source: The Arcane Research Weekly Update - Week 45

As the chart above shows, when Bitcoin made a new ATH around $ 69k earlier in the month, the indicator also showed a big positive spike.

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However, BTC was unable to maintain momentum and the price began to fall shortly thereafter. Financial rates have fallen sharply along with it.

Due to this decline in the price of Bitcoin, on November 10, about $ 500 million of long liquidations were observed.

Many traders seem to have bet that the price of BTC is moving higher after its new ATH, so they have opened new high long positions. But due to the crash, these positions ended up being liquidated.

On November 15 (that is, yesterday), the value of the indicator briefly went below zero. This is the first time it has happened since the end of September.

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Currently, the financial rates are just above zero. It seems that equilibrium has returned to the market because there are equal amounts of short and long term requirements.

However, with the latest BTC low, this balance may soon change.

BTC price

At the time of writing, the price of Bitcoin is trading around $ 60.9k, down 8% in the last seven days. Over the past thirty days, the crypto has gained 0.3% in value.

The chart below shows the trend of the price of the currency over the last five days.

BTC has continued its decline as it plunges down in the last couple of days | Source: BTCUSD on TradingView

Featured image from Unsplash.com, charts from TradingView.com, Arcane Research