As someone who closely follows the cryptocurrency market, I’ve seen firsthand how rapidly things can change in this space. Just a few months ago, we were witnessing record demand for Bitcoin and new all-time highs. But now, we’re seeing a shift in sentiment with the Bitcoin funding rate going negative for the first time since October 2023.
The Bitcoin funding rate has gone negative for the first time since October 2023.
As an observer, I’ve noticed some interesting insights from the data provided by CryptoQuant. The fact that negative rates are being paid to open new long positions in the Bitcoin perpetual futures market signifies a decrease in demand for Bitcoin following the unprecedented demand witnessed in March.
I’ve noticed an intriguing development in the Bitcoin market recently. In March, I observed the price soaring to a new record high of $73,000. Yet, since then, there’s been a noticeable correction. At the moment I’m writing this, Bitcoin is trading around $63,400 on CoinMarketCap, marking a nearly 13% decrease from its peak.
I’ve observed the decline in net inflows into spot Bitcoin Exchange-Traded Funds (ETFs) as reported by CryptoQuant. This decrease could be attributed to the recent Bitcoin halving event. With miners receiving fewer rewards for each block mined, traders may have reduced their motivation to open long positions on the cryptocurrency market.
“It certainly means that the desire for traders to open long positions has eased.”
Julio Moreno, CryptoQuant’s Head of Research
The interest of buyers in Bitcoin (BTC) has noticeably decreased. This downturn can be attributed to increasing caution among investors due to geopolitical uncertainties in the Middle East, as well as anticipated postponements in Federal Reserve’s interest rate reductions.
The reduction in funding rates occurred at the same time that U.S. spot Bitcoin ETFs experienced a decrease in daily investments. Specifically, on April 24, these ETFs saw an outflow of approximately $120.64 million. Just two crypto funds attracted capital: Fidelity’s Bitcoin Spot ETF with $5.61 million and ARK Invest/21 Shares Bitcoin fund with $4.17 million.
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2024-04-25 17:45