This week, the price of Bitcoin rebounded from last week's stagnant position, continuously hitting new historical highs over the past 7 days. The biggest question on everyone's mind in recent days is - when will the leading cryptocurrency surpass the $100,000 level?
While most investors are concerned about short-term goals, some market participants are more focused on the long-term prospects of the world's largest cryptocurrency. According to the latest on-chain data, Bitcoin's price may experience fluctuations earlier than expected.
Will the continuously rising bullish sentiment sustain the upward trend?
According to data from the market intelligence platform IntoTheBlock, Bitcoin's funding rate has seen a significant rise in recent days. The relevant indicator here is the 'Funding rate' metric, which tracks the regular fees exchanged between traders in the derivatives (perpetual futures) market.
When the funding rate is high or positive, it means that long traders are paying short position traders. Typically, this direction of regular payments indicates strong bullish sentiment in the market.
On the other hand, a negative value of the funding rate indicator means that investors holding short positions are paying traders holding long positions in the derivatives market. This trend indicates that the market is overshadowed by bearish sentiment.
Data from IntoTheBlock shows that the Bitcoin funding cost for perpetual swaps has increased by over 10%, rising up to 20% on major trading platforms. However, the on-chain company noted that this sustained increase in funding rates could suggest speculative overheating, which may lead to market corrections.
According to IntoTheBlock, one of the potential catalysts for this bullish sentiment is the U.S. government's attitude towards cryptocurrency under Donald Trump's leadership. With a 'strategic Bitcoin reserve' more likely under the incoming U.S. president's leadership, investors are hopeful that Bitcoin's valuation will exceed six figures.
As of the time of writing, the flagship cryptocurrency is valued at approximately $98,400, having risen 24% in the past hour.
The Bitcoin perpetual futures market remains constrained - what does this mean?
In a recent post on platform X, Glassnode revealed that the Bitcoin perpetual futures market 'remains constrained.' This indicates that despite the steady rise in BTC's price in recent weeks, some traders are still approaching the market cautiously.
Data from Glassnode shows that the Bitcoin funding rate is slightly above 0.01%, below the level when Bitcoin's price reached a local top in March 2024 (~0.07%). Ultimately, this suggests that the value of the leading cryptocurrency still has room for growth.
