A quant has explained how the Bitcoin funding rate (72 hour) may be able to correctly signal tops and bottoms in the price of the crypto. Bitcoin Funding Rate May Be Able To Indicate Tops And Bottoms In The Market As explained by an analyst in a CryptoQuant post, the 72-hour version of the funding rate looks to have been effective at pointing out tops and bottoms in the BTC market. The “funding rate” is the periodic payment that Bitcoin futures traders (either long or short) have to make between each other. When the value of this metric is negative, it means shorts are paying a premium to the longs to keep their positions right now. Such values show there are more shorts in the futures market at the moment, and the majority sentiment is bearish. On the other hand, positive values of the indicator imply longs are dominating the shorts currently. Naturally, this trend means the overall sentiment is bullish in the Bitcoin market currently. Related Reading | Bitcoin Trading Volume Continues To Remain At Low Levels Now, here is a chart that shows the trend in the BTC funding rate (72 hour) over the past few months: The relation between the BTC price and the funding rate | Source: CryptoQuant As you can see in the above graph, the quant has marked the relevant points that help establish a correlation between the Bitcoin funding rates and the price. It looks like whenever the indicator had a rising value along w...
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