Bitcoin’s long % rises, despite price correction — What else to watch for a bounce?
Bitcoin (BTC) saw a hike in long positions even as its price fell sharply, suggesting that its traders were caught in a long trap. In fact, the percentage of longs on Binance and OKX escalated significantly when BTC’s price fell to lows near $92k.
This trend hinted at an impending pivot, one where the excessive bullish sentiment could reverse itself, prompting a potential price recovery as shorts enter and longs exit
These cycles often precede significant market reversals. The downturn would position BTC for a certain rebound if the long percentages reach their peak and begin to decline.
This would signal a shift in sentiment, possibly trapping shorts in the process. Here, it’s worth noting that apart from the long percentage hike, BTC also showed other signs of rebound on the charts.
Bitcoin’s Funding Rate
The aggregated funding rate saw a sharp hike as the price escalated – A sign of strong bullish sentiment. Subsequently, the funding rate remained elevated while Bitcoin’s price began a descent – Pointing to an overextended market.
Traders likely entered long positions during the hike, and the market’s inability to sustain higher buying pressure resulted in a correction.
The pullback might have spurred profit-taking or incited shorts to capitalize on the high funding rate, introducing selling pressure.
Despite this, however, the sustained positive funding rate hinted at underlying market confidence, albeit caution might be warranted. If the funding rate sustains or reverses itself, it could signal potential market moves. Stabilization or a reversal in the funding rate could define Bitcoin’s near-term trajectory.
