Bitcoin Funding Rate Drops to 0% What It Means for the Next BTC Move
Alex Adler JR, a chain and macro research expert, pointed out in his recent X post that the average funding rate of second-hand exchanges (BYBIT and OKX) has fallen to zero. Interestingly, he also noted that every time this situation in this cycle triggered the macro bull run. The biggest question is: Are bulls running in the Bitcoin market?
Bitcoin futures funding rate reaches 0%
Bybit and OKX have dropped to zero, according to a chart titled “BTC: Futures Permanent Financing Rate (7D-SMA)” shown in Alex’s post, the average funding rate for the three highest second-tier exchanges.
Chart CONVERY is the financing rate of a Bitcoin futures contract that uses a simple 7-day moving average over time.
- If the funding rate is positive, it means more traders are betting on the rise in Bitcoin’s price. In other words, this indicates the dominance of long positions.
- If the funding rate is negative, it means more traders are betting on the price of Bitcoin to fall. In other words, it shows the dominance of short positions.
In our chart, the funding rate remains at zero. This means there is no obvious dominance between long traders and short traders. In short, this reflects market uncertainty.
Historical Trends: Bullish Signals for Neutral Fund Rate
Alex noted that in the current cycle, the Bitcoin market often shows bullish momentum immediately after the funding rate hits a neutral point.
This means there is a great opportunity for the BTC market to rise in the next few days.
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Current price and market sentiment of Bitcoin
Earlier this month, Bitcoin was priced at $102,417.80. Between February 1 and 5, the market fell sharply by nearly 5.67%. Between February 6 and 9, the market is in the close range of $96,615 and $96,440. Driven by strong bullishness, continue On February 10, BTC exceeded this range.
The market has surged by about 0.9% over the past 24 hours. However, the market has not recovered from the correction in early February. The market has fallen by 4.3% over the past 14 days.
In short, Bitcoin’s funding rate dropped to zero, and the signal market was hesitant. If history repeats itself, Bitcoin will soon see an uptrend.
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FAQ
Bitcoin financing rates are regular payments between medium- and short traders of permanent futures contracts, ensuring consistent with the price in the spot market.
Negative capital rates may be bullish because it indicates bearish sentiment that can lead to a brief squeeze and upward price movement.
You can check the Bitcoin financing rate on exchanges in their futures trading sections, such as exchanges such as Binance, BYBIT and OKX, or use a market data aggregator.
High funding rates indicate strong bullish sentiment, which means more traders are paying to maintain long-term positions, but this may indicate that the market is overheating.
