The price of bitcoin rebounded this week from where it left off the previous week, hitting successive all-time highs over the past seven days. In recent days, the big question everyone is asking is: when will the main cryptocurrency surpass the $100,000 level?
While most investors are concerned about a short-term goal, some market participants are more concerned about the long-term prospects of the world's largest cryptocurrency. Based on the latest on-chain data, it looks like the price of bitcoin could take a hit sooner than expected.
Will the growing bullish sentiment sustain the rally?
According to market intelligence platform <a target="_blank" href="https://x.com/intotheblock/status/1859972663457857880″ target=”_blank”>on the blockbitcoin funding rates have seen a notable rebound in recent days. The relevant indicator here is the “funding rate” metric, which tracks the periodic fee exchanged between traders in the derivatives (perpetual futures) market.
When the funding rate is high or positive, it implies that long traders are paying short traders. Typically, this direction of the periodic payment suggests strong bullish sentiment in the market.
On the other hand, a negative value of the funding rate metric means that investors with short positions are paying traders with long positions in the derivatives market. This trend suggests that the market is engulfed in bearish sentiment.
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Data from IntoTheBlock shows that bitcoin funding fees for perpetual swaps have increased by more than 10%, and up to 20% on major trading platforms. However, the chain company noted that this continued growth in the funding rate could indicate speculative overheating, which could lead to market corrections.
According to IntoTheBlock, one of the possible catalysts for this bullish sentiment is the US government's approach to cryptocurrencies under Donald Trump. With “strategic bitcoin reserves” a bigger possibility under the incoming US president, investors are confident bitcoin will surpass a six-figure valuation.
At the time of writing, the flagship cryptocurrency is valued at around $98,400, reflecting a 1% increase in the last 24 hours.
bitcoin perpetual futures market remains restricted: what it means
In a recent post on Platform x, Glassnode <a target="_blank" href="https://x.com/glassnode/status/1859986552895770890″ target=”_blank”>revealed that the bitcoin perpetual futures market “remains restricted.” This suggests that several traders are still approaching the market with caution despite the steady rise in btc price in recent weeks.
Data from Glassnode shows that bitcoin funding rates are just above 0.01%, which is nowhere near the level in March 2024 (~0.07%) when the btc price hit a local high. Ultimately, this suggests that there is still room to grow in the value of the leading cryptocurrency.
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