• News
    • Bitcoin
    • Altcoins
  • Regulation
  • Blockchain
  • NFT
    • NFT News
    • Collectibles
    • Crypto Art
    • Gaming
    • Play2Earn
  • Metaverse
  • Learn
  • Market Cap
What's Hot

The End of Tether? Why A Structural Shift In The Market Spells Trouble For USDT

2023-05-29

Reddit NFT Avatars Approach 10 Million Holders Milestone

2023-05-29

Bitcoin shrimps defy market trends with aggressive accumulation

2023-05-29
Facebook Twitter Instagram
Monday, May 29
Facebook Twitter Instagram
Patrol Crypto
  • News
    • Bitcoin
    • Altcoins
  • Regulation

    Is the US 30% Bitcoin mining tax dead?

    2023-05-29

    Russia backtracks from plan to create national crypto exchange

    2023-05-29

    Bitcoin Firebrand Michael Saylor Says Banking Establishment Will Oppose CBDCs, Predicts Stablecoin Wind Down

    2023-05-29

    Binance CEO highlights timing of Beijing’s web3 white paper amid China, Hong Kong crypto regulatory changes

    2023-05-27

    UK Prime Minister Rishi Sunak considering new rules to regulate AI amid concerns of ‘existential threats’

    2023-05-27
  • Blockchain

    Ethereum Transaction Volume Rivals Visa As Blockchain Transactions Soar

    2023-05-29

    3 Native Bitcoin Protocols Every Developer Should Know

    2023-05-29

    Fantom Will Return 15% Of Token Fees To Projects

    2023-05-29

    Chinese Healthcare, Energy Firms Enable CBDC Pay – Digital Yuan Adoption Accelerating?

    2023-05-28

    Layer 1 Perfect For Security And Privacy

    2023-05-27
  • NFT
    • NFT News
    • Collectibles
    • Crypto Art
    • Gaming
    • Play2Earn
  • Metaverse

    Virtual Showrooms: The Future of Retail in the Metaverse

    2023-05-29

    Hong Kong Police Launch CyberDefender Metaverse Platform

    2023-05-29

    BBC Studios Partners with Reality+ to Launch Metaverse Experiences

    2023-05-28

    Upland Gears Up for Genesis Week 2023: A Spectacular Celebration in Las Vegas

    2023-05-25

    China to Expand Metaverse Use in Key Sectors

    2023-05-25
  • Learn

    Bitcoin Profit & Investment Calculator (ROI)

    2023-05-25

    How to make money with cryptocurrency: Trading for Beginners

    2023-05-24

    Full Guide to Bitcoin Ordinals

    2023-05-24

    Pi Network (PI) Mining Explained How It Works & A Step-by-Step Guide to PI Mining

    2023-05-23

    Cryptocurrency Dash Review, Technological Features Explained, Roadmap and Dash Price

    2023-05-19
  • Market Cap
Patrol Crypto
Home»Bitcoin»Bitcoin Funding Rates On BitMEX Turn Deep Red, Here’s Why This Is Bullish
Bitcoin

Bitcoin Funding Rates On BitMEX Turn Deep Red, Here’s Why This Is Bullish

2023-05-10No Comments3 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email

Data shows the Bitcoin funding rates on the cryptocurrency exchange BitMEX have turned quite negative recently. Here’s why this may be bullish.

Bitcoin Funding Rates On BitMEX Have Plunged To Deep Red Values

As pointed out by an analyst in a CryptoQuant post, BTC felt a bullish boost the last time this pattern was observed. The “funding rate” is an indicator that measures the number of periodic fees that futures traders on a derivative exchange are currently exchanging between each other.

When the value of this metric is positive, it means the holders of long contracts are currently paying a premium to the short holders in order to keep their positions. Such a trend implies that the majority of the investors on the exchange hold a bullish sentiment right now.

On the other hand, negative values of the indicator suggest the shorts are overwhelming the longs at the moment. Naturally, this kind of trend is a sign of a bearish mentality being more dominant among the futures traders on the platform.

In the context of the current discussion, the relevant derivative exchange is BitMEX. Here is a chart that shows the trend in the Bitcoin funding rates for this platform over the last year and a half:

Bitcoin Funding Rates

Looks like the value of the metric has been quite red in recent days | Source: CryptoQuant

As shown in the above graph, the Bitcoin funding rates on the BitMEX exchange have taken a plummet toward deep negative values recently. This means that a large number of short contracts are piling up on the platform in comparison to long contracts.

See also  Bitcoin [BTC] gives way to bullish sentiment: Bye-bye, bear market?

Generally, when the futures market becomes too unbalanced towards any one side, a sharp price move in the opposite direction to what the investors are heavily betting on becomes more probable.

This is because a mass liquidation event, called a “squeeze,” is generally more likely to take place towards the side that has more contracts open. In a squeeze, a swing in the price triggers a large amount of simultaneous liquidations and these liquidations only end up fueling said move further in return. A cascade of liquidations can then occur thanks to this amplified price move.

Since the funding rates on BitMEX are heavily lopsided towards the negative side right now, a short squeeze is a possibility in the near term. From the chart, it’s visible that the indicator displayed a similar trend just earlier in the year.

This negative spike in March occurred as Bitcoin’s price plunged below the $20,000 level, but these red values were only temporary, as a short squeeze took place not too long after and lead to BTC recovering in spectacular fashion.

The metric observed some even more negative values following the November 2022 FTX crash, but the price didn’t see any appreciable surge following them. Though, nonetheless, Bitcoin still saw the bottom coincide with the red BitMEX funding rates.

It now remains to be seen whether the pattern that was seen in March 2022 repeats this time as well, with BTC observing a short squeeze that reverses the current decline.

BTC Price

At the time of writing, Bitcoin is trading around $27,500, down 4% in the last week.

See also  Bitcoin NFT collection Space Pepes see big surge in activity

Bitcoin Price Chart

BTC seems to have plummeted over the last couple of days | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com

Source link

Bitcoin BitMex Bullish deep Funding Heres Rates Red turn
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Bitcoin shrimps defy market trends with aggressive accumulation

2023-05-29

Is the US 30% Bitcoin mining tax dead?

2023-05-29

No All-Time High For Bitcoin In 2023, Former BitMEX Head Arthur Hayes Predicts

2023-05-29

Aave’s fortunes turn; time for bulls to shine?

2023-05-29
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Michael Saylor is still on the hook for alleged tax evasion, says MicroStrategy filing

2023-03-03

The Sandbox price charts show where another wave of selling could occur

2023-03-05

Uncovering the Secrets of Alien Worlds

2023-03-28

Subscribe to Updates

Get the latest news and Update from Patro Crypto about Crypto, Metaverse, NFT and more.

About
About

Our mission is to develop a community of people who try to make financially sound decisions. The website strives to educate individuals in making wise choices about Cryptocurrencies, NFT, Metaverse and more.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest YouTube
Top Insights

The End of Tether? Why A Structural Shift In The Market Spells Trouble For USDT

2023-05-29

Reddit NFT Avatars Approach 10 Million Holders Milestone

2023-05-29

Bitcoin shrimps defy market trends with aggressive accumulation

2023-05-29
Get Informed

Subscribe to Updates

Get the latest news and Update from Patro Crypto about Crypto, Metaverse, NFT and more.

  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
© 2023 Patrolcrypto.com - All rights reserved.

Type above and press Enter to search. Press Esc to cancel.

  • JDBJDB(JDB)$0.021575-0.61%
  • bitcoinBitcoin(BTC)$27,602.00-1.80%
  • ethereumEthereum(ETH)$1,887.92-1.22%
  • USDEXUSDEX(USDEX)$1.08-0.31%
  • tetherTether(USDT)$1.00-0.14%
  • binancecoinBNB(BNB)$310.68-0.95%
  • usd-coinUSD Coin(USDC)$1.00-0.19%
  • rippleXRP(XRP)$0.4907780.87%
  • cardanoCardano(ADA)$0.378788-0.95%
  • staked-etherLido Staked Ether(STETH)$1,887.91-1.25%