{"id":34232,"date":"2025-01-08T18:00:10","date_gmt":"2025-01-08T18:00:10","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=34232"},"modified":"2025-01-08T18:00:10","modified_gmt":"2025-01-08T18:00:10","slug":"caution-reigns-as-bitcoin-slips-under-100k-and-funding-rates-reflect-fear","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=34232","title":{"rendered":"Caution Reigns As Bitcoin Slips Under $100K And Funding Rates Reflect Fear"},"content":{"rendered":"

Bitcoin started the year with a strong price rally, surging by 5% on January 6th to reclaim the $100k mark for the first time in weeks. The asset\u2019s price continued its run up to $102,760 before undergoing a healthy correction, pushing it back below $100k. As of press time, Bitcoin<\/a> trades between $96k and $102k, with total trading volume hitting $6.58 billion.<\/p>\n

While Bitcoin\u2019s recent price performance looks healthy, the asset\u2019s funding rate data tells a different story. Based on Glassnode\u2019s data, Bitcoin\u2019s current average funding rate dropped to 0.009%, below its neutral level of 0.01%. Lower-than-usual funding rate data suggests a cautious long-term trading sentiment for investments, including Bitcoin.<\/p>\n

After peaking at 0.026% in mid-December, the weekly MA of perpetual funding rates has cooled to 0.009% \u2013 just below the neutral 0.01%: https:\/\/t.co\/CORjRx0X2k<\/a><\/p>\n

This suggests a cautious positioning, with speculators showing limited willingness to pay premiums for long\u2026 pic.twitter.com\/JwSPpZRpeG<\/a><\/p>\n

\u2014 glassnode (@glassnode) January 7, 2025<\/a><\/p>\n\n

A Look At Bitcoin\u2019s Average Funding Rates<\/strong><\/h2>\n

The average funding rate is just one of the technical indicators used to assess the market\u2019s sentiment on Bitcoin and other investments. A funding rate, expressed in percentage, is set by crypto exchanges for their perpetual futures contracts. If this rate is positive, long positions periodically settle short positions; when it\u2019s negative, short positions periodically settle long positions.<\/p>\n

According to data, the funding rate\u2019s weekly moving average dropped to 0.009%, below the neutral score of 0.10%. This week\u2019s updated funding rate reflects a steep decline from the 0.0026% mid-December, suggesting a cautious investor sentiment for long positions.<\/p>\n

Is Bitcoin\u2019s Price Rally Sustainable?<\/strong><\/h2>\n

Coinglass<\/a> also shared that the assets\u2019 Open Interest-Weighted Funding Rate increased to 0.0058% but was still below January 5th\u2019s high of 0.0113%. Then, Coinshares also revealed that the Volume-Weighted Funding Rate increased to 0.0051%, but still way below a previous high of 0.0111%.<\/p>\n

Interestingly, the decline in funding rates indicates that most traders are cautious as Bitcoin struggles to hit and keep the $100k mark. Their reluctance to put their money on leveraged exposure means they\u2019re not confident in Bitcoin\u2019s ability to sustain its price surge soon.<\/p>\n

What\u2019s Next For Bitcoin?<\/strong><\/p>\n

Still, investors can find good news in the market this week. The asset\u2019s derivatives trading activity increased, with its daily trading volume increasing to $85 billion, or a surge of 42%. Open interest saw a modest increase of 2%, and the asset\u2019s Long\/Short ratio is set at 1.0243, which makes investors\u2019 sentiment neutral. Also, Bitcoin\u2019s Chande Momentum Index (CMI) increased to 58.71 during the price rally, which topped $100k, but this slowed down as the price settled below $100k.<\/p>\n

Featured image from The Independent, chart from TradingView<\/em><\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin started the year with a strong price rally, surging by 5% on January 6th to reclaim the $100k mark for the first time in weeks. The asset\u2019s price continued its run up to $102,760 before undergoing a healthy correction, pushing it back below $100k. As of press time, Bitcoin trades between $96k and $102k, […]<\/p>\n","protected":false},"author":0,"featured_media":34233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-34232","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/34232"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34232"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/34232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/34233"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}