Originally published on: December 18, 2024
According to a crypto analyst, the Bitcoin funding rate indicates that the market is not overheated, suggesting that Bitcoin’s price is not peaking too early in the cycle.
Using a 30-day exponential moving average (EMA) to analyze the funding rate, CryptoQuant contributor Avocado onchain stated in a recent report that there are no visible signs of late-cycle overheating. This suggests that Bitcoin’s upward trajectory is likely to continue with room for further growth.
In a Dec. 17 Xpost, pseudonymous crypto trader Rekt Capital mentioned that Bitcoin is just beginning its parabolic phase in the cycle, which typically lasts 300 days but is currently on “day 41.”
The current BTC funding rate on Binance, the largest crypto exchange by trading volume, stands at 0.0084%. This rate helps align futures and spot market prices, indicating whether the market is buyer- or seller-dominated. A positive funding rate means buyers pay sellers a fee to maintain their positions, while a negative rate means sellers pay buyers.
During a market drop in August, Bitcoin’s funding rate on Binance hit its lowest levels of the year, signaling a shift in market sentiment.
Despite Bitcoin hitting a new all-time high of $108,239 on Dec. 17, the funding rates are not considered overheated. Mister Crypto, another pseudonymous trader, suggested that Bitcoin will continue to rise as long as the rates remain below 1%.
Avocado noted that trading volumes in the future and spot Bitcoin markets saw a significant increase since October, driving the upward price momentum.
While some analysts predict short-lived price dips in 2025, Bitfinex analysts anticipate strong institutional demand supporting Bitcoin’s price. They believe that any corrections will be mild, with potential price targets of $145,000 and $200,000 under favorable conditions by mid-2025.
This article serves as information and does not offer investment advice. Readers are encouraged to conduct their own research before making any financial decisions.
