• Home
  • Bitcoin’s Value Drop and Funding Rate Cut: A Potential Buying Opportunity?

Bitcoin’s Value Drop and Funding Rate Cut: A Potential Buying Opportunity?

What Bitcoin Needs for an Uptrend

To see an uptrend, Bitcoin needs a significant decrease in value and a reduction in the funding rate. A buying signal could emerge when these two factors come together.

The Role of the Funding Rate

The funding rate of Bitcoin could play a crucial role in a possible price increase. It rose to 0.049% in early January as many traders went for leveraged long positions. This happened in anticipation of the decision of the US Securities and Exchange Commission (SEC) regarding the Bitcoin Spot ETF. However, the situation has since “cooled down” as the price of Bitcoin has fallen. The current funding rate is 0.001%, which, despite the recent price drop, indicates a bullish market.

The Need for a Capitulation

According to the pseudonymous CryptoQuant analyst MAC_D, a capitulation event must occur to end the current downtrend. This would result in a mass liquidation of long positions. If the price drops sharply and the funding ratio on the 1-hour chart becomes negative, it could mean that leveraged traders are overly pessimistic about the market, which could be a good opportunity to buy back BTC,” notes the analyst.

Decrease in Profitable Transactions

Currently, Bitcoin is changing hands at a price of $39,956. Since the introduction of tradable Bitcoin ETFs on January 10, the value of the cryptocurrency has fallen by 13%. This price drop is due to increased profit-taking activity, which has led to an increase in reserves on the exchanges. Since January 10, the total number of Bitcoins held on exchanges has increased by 0.47%. According to CryptoQuant, 2.1 million Bitcoins are on the exchanges at the time of writing.

alert-circle
You can also find us on Telegram: Click here to follow our Telegram channel.

Conclusion

So, to see an uptrend, Bitcoin needs to experience a significant decrease in value and a reduction in the funding rate. A buying signal could emerge when these two factors come together. Despite the recent price drop, the market remains bullish, indicating a possible recovery.

Sources: CryptoQuant, CoinMarketCap, Santiment

Casinos: 50
Profile Bitcoin
Symbol BTC
Coin type Alt Coin
Transaction Speed Slow
Pros
  • First cryptocurrency, therefore very widespread
  • Largest selection of casinos among the coins
  • Many BTC based bonus offers
Cons
  • Fairly low transaction speed
Price $72,395.00
24h % 1.84 %
7d % 7.98 %
30d % 12.18 %
60d % 22.30 %
1y % 111.34 %
Market Cap $1,431,884,741,399.00
Max. Supply 21,000,000.00
Official Links
Socials Reddit | X | Message Board
Best 3 Bitcoin casinos

Latest News

Paula Winkler

Created by

After over 6 years in print journalism, I stumbled into the iGaming niche in 2017. One thing became evident to me quickly: Online Casino Reviews need more transparency! I joined the Kryptocasinos.com Team in 2023 and are the main expert for all topics related to „Player Security“.
In my private life, I am an active member of the volunteer fire department and enjoy the outdoors with my dog Ruby.
Reviewed by
Nerd of Numbers

Last update: 26. September 2024

kryptocasinos.com Logo Advertising transparency

We are independent, transparent and funded by revenue we generate when you sign up at a casino through us.

Our goal is to help you make better decisions when choosing a casino by offering different information, providing filters and comparison tables, and publishing objective content. Thus, we give you the opportunity to research for free, compare casinos and make your decision based on that.

We cannot guarantee that a casino that is very good for us will fit your type of player and your circumstances.

Why trust us?

We work according to transparent editorial guidelines and disclose our testing methods as well as funding. This article may contain links to our partners, but this does not influence our objective view in any way.

🍪
We use cookies. By using this site, you accept them.