Bitcoin has undergone a strong drop since the highs seen yesterday. The price of the leading cryptocurrency fell from its highs of $13,850 to lows around $12,900.
This drop was seemingly a result of the drop in the U.S. stock market. The Dow Jones and the S&P 500 have dropped the largest they have in months, plunging 3% lower amid some uncertainty about fiscal stimulus and the upcoming election.
Bitcoin’s price action has scared some investors, so much so that futures markets have begun to show short positioning. This may be more bullish than bearish, though, despite how contrary that may seem.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Bitcoin Primed to Rally as Binance Futures Go Negative
Bitcoin’s strong drop lower has scared many investors that were previously exuberant. According to data from ByBt, which tracks crypto-asset derivatives markets, the BTC funding rate on Binance briefly breached negative territory, printing -0.013%/eight hours.
One crypto-asset analyst thinks that this negative print is a “pretty big deal.” Commenting on the matter, he shared the image seen below and said:
“Binance funding being negative is a pretty big deal. Just sayin. A bunch of plebs are gonna get their lunch money taken away soon.”
The funding rate is the recurring fee that long positions pay short positions on a regular basis to normalize the price of the future to the price of the spot market. This funding rate indicates which side of the market is more agressive; if the funding rate is positive, it suggests that there are more agressive longs than shorts, and vice-versa.
Binance’s funding rate turning negative is notable as the funding rate on the exchange is often at a neutral or positive level.
Chart of BTC's funding rates across the board over the past day with analysis by crypto trader Byzantine General (@Byzgeneral on Twitter). Source: Bybt, a derivatives tracker.
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Crucial Technical Trends Still Bullish
Analysts remain bullish, citing a number of technical analysis trends. NewsBTC’s Tony Spilotro shared this chart below earlier today.
it shows that Bitcoin is in the midst of a macro RSI breakout. As the chart shows, each time the RSI looked as it does now, the cryptocurrency surged dramatically higher.
Fourteen RSI breakouts resulted in 239% climb on average | Source: BTCUSD on TradingView.com
The cryptocurrency was rejected at $13,800 as aforementioned. However, this RSI analysis suggests that Bitcoin has room to rally in the days and weeks ahead once bulls regain some footing.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Analysts Flip Bullish as Binance's Bitcoin Funding Rate Flips Negative
by Nick Chong on October 29, 2020 at 05:29AM
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