The sustainability of any market price surge often relies on rising Funding Rates, which reflect robust demand in the derivatives market. Without this increase, upward trends may falter. Notably, this rise does not need to occur immediately, but its absence during a rally raises concerns about the market's strength.
In the recent Bitcoin rally, Funding Rates showed a sharp increase midway through the upward trend, suggesting a delayed influx of demand. However, after Bitcoin faced rejection at the $108K resistance, Funding Rates declined significantly.
This decline highlights:
Capital Outflow: A reduced commitment from traders in the derivatives market.
Weak Bullish Momentum: Insufficient support for maintaining the uptrend.
The current state of Funding Rates aligns with the broader market's sentiment, where participants exhibit hesitation, particularly after the rejection at $108K.
If Bitcoin fails to hold above the $90K support, the market could face:
Increased Selling Pressure: Triggered by a loss of confidence among participants.
Deeper Corrections: Potentially testing lower Fibonacci levels or psychological thresholds.
Conversely, if Funding Rates recover alongside strong buying activity, Bitcoin could stabilize and resume its upward trajectory.
Written by ShayanBTC
