Could Fear Fuel Bitcoin’s Comeback? Analyst Spots a Surprising Pattern
The price of Bitcoin seems to have bleached investor confidence in assets in recent days, as BTC sees less green days and less buzz in the community.
In any case, some analysts are still eager to analyze BTC and its main metrics, at least to see if there is hope.
An example is a crypto analyst known for his pseudonym “Avocado onChain”, who recently shared a Insight The focus on BTC is on the fundraising rate of the museum. The funding rate representing the cost of medium- and long-term or short positions in the futures market can provide insight into market sentiment.
The reduction in funding rate usually indicates Growing pessimismtraders who previously held bullish positions were forced to cover up their positions due to losses incurred. This shift in sentiment may have a cascading effect, leading to large-scale liquidation and further declines.
Binance’s funding rate and rebound potential
Avocado recently went on a post titled “Monitoring the funding rate of two people: Will Bitcoin rebound after extreme fear?” According to analysis, the famous long position liquidation has occurred recently, putting the market in extreme fear.
Binance’s funding rate is a platform known for its large retail investor base, showing a pattern that could hint at future price movements. Historically, binary negative funding rates are relatively few, but when they occur, they are usually before A huge rebound.
Avocado believes that this dynamic is related to the behavior of retail traders, who dominate Binance’s trading volume. When these traders show higher fears (artificially active destinations through negative capital rates), Bitcoin tends to ignore existing emotions and recovery.
Analysts also pointed out that Bull marketBitcoin’s price rebounded after a negative fund rate triggered by large-scale liquidation.
This historical pattern may indicate that, despite the current market environment, a further decline in funding rates may indicate a reversal. Essentially, if the negative capital rate reappears, it may indicate that the market has reached a point of surrender, usually the predecessor of continuous recovery.
Bitcoin market performance
Meanwhile, Bitcoin continues to face challenges in its upward momentum. Although the asset briefly rebounded to $100,000 earlier today after a mixed report on the U.S. work report, it was quick Lost ground And this recovery cannot be maintained.
At the time of writing, BTC is trading at $98,226, reflecting a 1.8% increase over the past day. Interestingly, although Bitcoin is higher at this time last week, today’s price Trading volume More than last week’s level. It is worth noting that so far, BTC’s daily trading volume has risen from $34 billion last Friday to $55 billion today.
Feature images created with DALL-E, TradingView’s chart
