Bitcoin fund prices fell below neutral two weeks ago after finally recovering from a month-long downtrend. This raised fears of another downtrend starting in the market. However, that quickly changed as last week’s numbers came out. This time around, bitcoin financing prices paint a better picture of the digital asset.
Funding rates are back to neutral
Bitcoin funding rates for the past week were more upbeat compared to previous weeks. This is because he continued to maintain his positive stance on the neutral throughout the entire seven days; There was not a single point in the week that funding rates had actually fallen below the neutral level. This is the first time since March that funding rates have remained above the negative level for a week.
A recovery in funding rates is always a welcome change in the market, which is why last week’s day remains important. With a market like this, where Bitcoin is still struggling to comfortably break above $23,000, there should be a huge change in not only sentiment but the amount of money being pumped into the space.
BTC funding rates return to neutral | Source: Arcane Research
With funding rates recovering to neutral, it once again puts them on the path to becoming neutral, something that has eluded Bitcoin for most of the year thus far. The trend, which started in June, is now at an acceptable point, but the end game remains to find rates that turn positive if Bitcoin is to continue its bullish run.
BTC trading below $23,000 | Source: BTCUSD on TradingView.com
Will Bitcoin recover?
Bitcoin is still trending at $22,800, which has surprisingly become a support level for the digital asset. This level continues to hold temporarily but it needs a big boost to rise above this level. With funding rates recovering, traders will likely provide this much needed boost.
Related reading: Why Bitcoin Investors Should Pay Attention to the Macro Environment
As for the leverage in the bitcoin market, it remains high. This means that more traders are opening positions in the digital asset. But it also puts them in a precarious position in a situation where liquidations can build up quickly, especially with a move below $22,000.
However, bullish indicators remain strong, albeit slightly weaker compared to last week. The $23,000 resistance is not as strong as the bears would like, which puts the next major resistance well above $23,500. If Bitcoin manages to beat the 50-day moving average again, it is likely to rise above $24,000 again.
Featured image from The Economic Times, charts from Arcane Reseach and TradingView.com
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