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Bitcoin Exhausted: Funding Rates Look Pessimistic for Analysts
As the market faces a significant decline in trading activity, perpetual contract funding rates have plummeted to unprecedented lows. Normally associated with perpetual contracts, these rates typically follow a pattern of fluctuations and adjustments to ensure the stability of the derivatives market.
However, the current circumstances suggest that this pattern has been disrupted. The recent fall in demand for assets could be interpreted as a sign of exhaustion within the cryptocurrency space. This trend could be attributed to either the extreme volatility witnessed in 2021 or perhaps the general market sentiment towards cryptoassets has shifted.
Regardless, this drop in funding rates is an alarming indication that traders are not optimistic about Bitcoin’s (BTC) future performance. In the past, such low values have often preceded a significant downturn in the market. It seems like the bears have taken control of the narrative.
On the other hand, relative strength indicators suggest that the sentiment on the cryptocurrency front has turned more bearish compared to last year’s events, which could signal a shift towards a new trend.
Source: u.today
