Matrixport: Bitcoin’s Low Funding Rate Indicates Spot Buying Is Driving Rise, Allowing For Market Recovery
In Brief
Matrixport notes that Bitcoin’s funding rate nearing zero, suggesting traders can increase long positions, driving prices up.
Cryptocurrency service provider Matrixport shared its latest analysis, highlighting that despite Bitcoin’s typical volatility, its funding rate has approached zero. This indicates that futures traders are not heavily positioned on the long side, even in light of the recent Bitcoin rally. As a result, this situation may allow traders to increase their long positions, potentially leading to higher prices.
The company also pointed out that the low funding rate suggests the recent rally could have been driven by spot buying, which is generally more strategic and long-term compared to speculative futures activity. This is viewed as a positive sign, indicating that the market is not excessively leveraged, which leaves room for further growth.
Bitcoin Weakens After Last Week’s Bull Run
As of the time of writing, Bitcoin is trading at $64,198, reflecting a decline of over 2.18% in the past 24 hours.
The price fell after surpassing the $66,000 level earlier today. The 24-hour low and high for the coin were recorded at $64,066 and $66,069, respectively. This downward movement occurs despite $1.11 billion in weekly inflows into US spot Bitcoin exchange-traded funds (ETFs) as of September 27th, according to SosoValue data.
Additionally, Bitcoin’s market dominance has decreased by 0.48%, now standing at 55.97%. Meanwhile, its market capitalization is currently above $1.26 trillion.
The cryptocurrency has retraced some of its recent gains as the market anticipates an upcoming speech from US Federal Reserve Chair Jerome Powell, along with the release of the country’s labor market data expected on Friday.
Jerome Powell is likely to discuss the economic outlook and may provide insights into the Federal Reserve’s monetary policy. His comments, particularly regarding inflation and interest rates, often influence market movements, including those in the cryptocurrency sector. Additionally, the US Labor Department is set to publish its monthly non-farm payrolls report, which will give an overview of the nation’s job market and economic health. While the August data indicated a weakening labor market, there are expectations for improvement in the September figures.
Meanwhile, the global cryptocurrency market capitalization decreased by 1.06%, reaching $2.27 trillion. In contrast, the total cryptocurrency market volume saw a notable increase of 30.15%, rising to $62.64 billion in the past 24 hours, according to data from CoinMarketCap.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
