With the recent sales, Bitcoin is going through an important turning point in the region close to the $ 60,000 level. With this movement in the cryptocurrency market, data in derivative transactions indicate that short positions have increased and funding rates have turned negative. This trend, observed in major stock exchanges, has accelerated especially with the recent price declines.
Change in Funding Rates and Increase in Short Positions
Funding rates on perpetual futures reflect the cost of carrying leveraged positions and are currently below neutral. The negative funding that occurs as the Bitcoin price declines indicates that market participants are opening predominantly sell positions. However, current levels have not yet reached the level of extreme pessimism and typical capitulation conditions have not occurred.
Fragile Balance at Technical Thresholds
While Bitcoin tries to hold on above $60,000, which is considered critical for spot and derivative transactions, it encounters strong resistance above. The price stabilization within a certain range despite the increase in short positions indicates a fragile equilibrium state of the market. A possible upward move at this point could quickly liquidate overleveraged selling positions.
In an opposite scenario, as downward pressure continues, funding rates may turn even more negative and the downward movement may accelerate again.
According to observations of derivatives market analysis firm CryptoQuant, market participants think that short-term but misleading upward movements may be seen in Bitcoin’s current downward trend. Such jumps may occur in the form of a short-term recovery of the price to the $ 75,000 level or a sharp rise from the $ 60,000 band, creating the perception in many investors that the bottom point has been seen.
Ardi states that during Bitcoin’s downward trend, there may be a rapid and dramatic rise, contrary to the market’s expectations, and these movements may lead most traders to think that the decline has ended.
It is stated that such fluctuations enable the waiting buyers in the market to become active again and may contribute to liquidity before the next decline.
Although Daniel states that Bitcoin is in a downward trend in the medium term, he emphasizes that there may be a rebound potential at points close to support levels in the short term.
As Bitcoin fell below $65,000 in the first hours of Asian trading, approximately $230 million in long positions were liquidated. This picture observed in the markets shows that global macroeconomic uncertainties continue to have an impact.
Bitcoin’s effort to maintain critical levels in both the derivative market and the spot market and increasing short positions indicate that volatility may continue in the coming period.
