According to CoinDesk, cryptocurrency research firm K33 Research said in a market report released on Tuesday that although investors are still worried about the risk of further downside, there is a reliable indicator that the market will appear in the coming weeks and months. Significant rebound.
According to the report, the 30-day average funding rate for Bitcoin (BTC) perpetual contracts fell into negative territory, something that has only happened six times since 2018. K33 analysts Vetle Lunde and David Zimmerman wrote:
"In the past, monthly funding rates hitting negative levels have coincided with market bottoms."
The report notes that based on previous instances where the metric flipped into negative territory, Bitcoin’s average return over the subsequent 90 days was 79%, with a median 90-day return of 55%.
Source: K33 Research
Meanwhile, open interest in derivatives gradually climbed to levels not seen since late July as shorts piled in. The report noted that, combined with continued negative funding rates, these indicators point to potential short squeeze risk in the market. The analyst wrote:
“A similar funding rate environment provides a very strong case for active exposure to BTC in the coming months.”
Source: coinglass
Source
