Bitcoin, the largest cryptocurrency, has shown some vital signs of life after the $ 20,000 integration phase. However, the efforts were not sufficient due to the intensified liquidation surrounding the crypto market. On-chain data shows that Bitcoin’s funding rate has sunk to a seriously negative value. This can cause potential short squeeze and therefore can affect the price of BTC.
Bitcoin’s funding rate continued to show a tough scenario as the metric fell into a serious negative value. This could incorporate or even pave the way for short squeeze on the market.
Financing rate measures the regular fees that long and short traders of Bitcoin futures exchange with each other. At the moment, there are more shorts on the market, Ergo, the overall sentiment is bearish. Obviously, futures traders are stacking shorts on the market.
Can this help BTC escape the $ 20,000 trap? As CryptoQuant analysts have pointed out, BTC may see a slight increase in the short term due to current funding rates.
A similar pattern can be seen in the figure above the chart when funding rates have reached surprisingly low levels. There, prices rose sharply, short squeeze occurred, and price volatility was further amplified.
Short squeeze occurs when a large number of short traders are cleared due to sudden price fluctuations.
Especially in the last 24 hours 24,160 Traders are liquidated and the total liquidation amount is $ 79.26 million. The crypto market on July 2 recorded a liquidation of over $ 250 million as an increase in losses across other cryptocurrencies. Statistics at the time of the press were about $ 79.55 million.
Needless to say, Kingcoin led the charge, according to Coinglass data. Comparing the above two trends, price fluctuations can cause pressure and provide some relief.
What do you expect?
BTC’s pricing behavior has been squeezed to $ 18- $ 21k in the last two weeks. June saw red lights in both markets–30% spots, while derivatives were -11%.
Today, the entire financial markets are eagerly awaiting the Fed’s reaction to inflationary pressures. In any case, one thing is clear-whether it’s small or large, BTC holders will continue to support the largest cryptocurrencies.
At the time of pressingDress holding <1 BTC Was adding To their balance in 2022 at an amazing pace. Interestingly, since January they (small holders) have added 113,884 BTC.