Bitcoin’s funding rate on the futures and derivatives market has reached a new low, turning negative for the first time this year as market sentiment shifts following the halving event. Analysts predict that the short-term upside will be limited and that the spot price will consolidate.
Throughout this year, Bitcoin’s funding rate has been decreasing, and in the past week, it has turned negative for the first time since last October, as the leading cryptocurrency battles its post-halving price dip. Currently, BTC trades at $63,593, experiencing a 4.14% drop in the past day from its intra-day high of $66,720. Despite this, investor interest remains high, with trading volume increasing by 33% to $31.9 billion. Since the halving event less than a week ago, Bitcoin has managed to withstand bearish pressure, gaining 3.3% in the past week.
However, according to research platform Kaiko, investor interest in the derivatives market has been declining for several weeks, and in the past week, the funding rate has turned negative. This last occurred in October of last year.
Fortunately, since the halving event, the funding rate at the top three exchanges, namely Bybit, Binance, and OKX, has slightly improved, as reported by Coinanalyze.
Kaiko highlighted in a note that despite briefly turning negative prior to the halving, the funding rates for BTC perpetual contracts remained close to neutral. Negative rates imply that short sellers are paying longs to maintain their positions. In general, open interest remains high, surpassing $10 billion, despite retracting from its record high in USD terms in March.
What lies ahead for Bitcoin? In further evidence of cooling investor interest, BTC spot ETFs experienced a challenging day on Wednesday, with only $9.8 million in inflows. Additionally, Grayscale saw outflows of $130.4 million, resulting in a net outflow of $120.6 million for the sector.
However, the most significant news came from BlackRock’s IBIT ETF, as its inflow streak of 71 consecutive days finally came to an end. On Wednesday, IBIT failed to attract any new investments, breaking into the top ten longest ETF inflow streaks of all time.
Analysts have differing views on whether Bitcoin will be affected by the typical post-halving dump, as investors shift their focus to altcoins. Some believe that BTC will remain stable this time, considering it has shown its best performance following a halving event.
Tyrone Ross, the founder of 401 Financial, explained to Yahoo! that the halving should not change anything significantly as it is already programmed into the code. He believes that it is not a special or magical event that makes Bitcoin more or less compelling to invest in.
On the other hand, Standard Chartered is bullish on Bitcoin’s future. The bank’s analysts expect the top cryptocurrency to reach $150,000, as reported by Crypto News Flash.
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