Today the price of Bitcoin abruptly rose by 6% from $10,136 to as high as $10,743.
After this powerful 24-hour rally, analysts are now turning cautiously bullish for various reasons but will Bitcoin price be able to tackle the $11K mark any time soon?
Currently, the factors that appear to be lifting investor sentiment are negative funding rates, BTC whale activity, and the U.S. dollar's recent weakness.
At the moment, Bitcoin's funding rate across various futures exchanges is either neutral or negative, despite the price hovering above $10,000.
Bitcoin futures exchanges utilize funding to ensure there is balance in the market and it disincentivizes the majority of the market to prevent the market from swaying to one side for a prolonged period.
If long contracts, or traders betting on a Bitcoin price increase represent the overwhelming majority, they will need to pay short contract holders.
When the funding rate turns negative, it means the majority of the market is shorting BTC. Typically, when funding rates remain below zero, it causes a short squeeze and a surge in BTC price.
The overcrowded Bitcoin market with short contracts coincides with some top whales possibly moving their holdings off exchange.
Optimistic whale activityAccording to Whalemap, a group of on-chain analysts who track crypto whale activity, top buyers moved their BTC on Sept. 23.A map of unspent HODLer Bitcoin.
Before the initial rally, Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said $10,700 to $10,800 is likely for Bitcoin.
3 reasons why traders turned bullish after Bitcoin price surged to $10.7K
Published on Sep 24, 2020
by Cointele | Published on Coinage
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