- Funding rates provided a bullish signal, but the Coinbase Premium Index could resist the uptrend.
- BTC may have reached a local top, delaying its rise to a new high.
Bitcoins [BTC] The funding rate has been low since mid-May, AMBCrypto confirmed. While this implied low expectations from investors, it could be good for BTC’s price.
The financing rate is the cost of keeping an open contract in the market. When the value is positive, it means that the perp price is trading significantly above the index value
Lower Optimism, Higher BTC Prices?
On the other hand, a negative financing rate indicates that the spot price is higher than the contract price. At the time of writing, Bitcoin’s funding rate was $0.01%.
But even though it was positive, this was a lower reading compared to what it was a few weeks ago. From a trading perspective, the low funding rate combined with the falling price indicates that Bitcoin buyers are weakening Bitcoin’s price.
Source: Santiment
However, it also means that spot traders became aggressive. If this continues, Bitcoin could reach $70,000 again in a short time.
But the rebound may not be quick. This is due to the state of the Coinbase Premium Index. The index is the difference between the price of BTC on the Coinbase exchange and its value on other exchanges.
If the value of the index is high, it means that US investors are buying a lot of BTC, putting significant pressure on the price. However, a reject in the metric indicates an increase in Bitcoin sales by investors in the country.
At the time of writing, the Coinbase Index Premium was -0.10, indicating that selling pressure was strong. From the chart below, AMBCrypto noted that this decline was one of the reasons why Bitcoin kept getting rejected.
Source: CryptoQuant
There are still bearish forces at work
However, if the value rises, it could cause a breakout for BTC. Analyst TraderOasis also agreed with this in his analysis of CryptoQuant, noticing That,
“As a result, the rise in the Coinbase Premium Index indicator will be our signal when the price reaches the daily gap.”
Additionally, AMBCryto examined Glassnode’s investor capitalization. Investors’ capitalization can tell if BTC is close to the bottom or has reached a local top.
At the time of writing the value was around same place as the price of Bitcoin, indicating that the coin was in a critical area. Should the metric move above BTC, it would indicate a local top and force a correction.
Conversely, if Bitcoin’s price rises much higher than this, its value could rise and it could test $70,000 again.
Source: Glassnode
Is your portfolio green? Check the Bitcoin Profit Calculator
However, volatility around BTC remained low at the time of writing. This indicates that the price may continue to fluctuate within a narrow bandwidth for some time to come.
Looking further, there is a chance that the statistics mentioned above could switch to a positive sign. If this is the case, the coin’s price could attempt to surpass its all-time high before the end of June.