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Bitcoin Funding Rate Enters Deep Red on Binance – Short Squeeze Soon?
The cryptocurrency market has witnessed a significant shift in sentiment over the past 24 hours. A recent observation by CryptoQuant, a prominent analytics platform, reveals that Bitcoin’s (BTC) funding rate on Binance, the world’s largest crypto exchange by trading volume, has plummeted into deeply negative territory.
As of this writing, the data indicates that the funding rate is hovering around -0.0008%. This stark decline suggests a profound change in market dynamics and sentiment. The significant drop in the funding rate could be attributed to the aggressive selling pressure emanating from Bitcoin retail traders.
According to CryptoQuant’s analysis, the current situation bears striking similarities with previous instances where extremely low funding rates have preceded local price bottoms and subsequent bullish trend reversals. In other words, the market is setting itself up for a short squeeze.
A short squeeze occurs when short sellers are forced to cover their positions due to rising prices, further fueling an upside move. This phenomenon often leads to a sharp increase in the value of Bitcoin.
As it stands, the price of BTC currently sits at around $96,950, reflecting a 2% gain over the past day. Given the current market momentum and on-chain observations, there is a strong likelihood that the cryptocurrency will surpass the psychological barrier of $100,000 by the end of the weekend.
The recent surge in bullish sentiment has been fueled by an influx of long-term holders returning to the fold, bolstering Bitcoin’s position and paving the way for potential short squeezes. As investors continue to scrutinize market developments, a return to previous all-time highs does not appear improbable.
As the narrative unfolds, the question remains: will this current upward momentum sustain itself, or are we simply witnessing a fleeting recovery before another downturn? One thing is clear – the funding rate on Binance has entered deeply negative territory, implying that short sellers may be forced to re-evaluate their positions.
Source: https://bitcoinist.com/bitcoin-fundin-rate-enter-deep-red-on-binance-short/
