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Bitcoin Funding Rates Turn Positive, Why The Rally May Not Be Over

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Two weeks ago, Bitcoin funding rates fell below neutral levels after they finally bounced back from a month-long downtrend. This caused fears of the beginning of a new bearish trend in the market. However, the situation quickly changed when the figures for the past week appeared. This time around, Bitcoin funding rates paint a better picture for the digital asset.

Funding rates return to neutral

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Bitcoin funding rates over the past week have been more optimistic compared to previous weeks. This is because it continued to maintain a positive value at a neutral level for all seven days; there was not a single moment this week when funding rates actually fell below the neutral mark. For the first time since March, funding rates have consistently remained above the negative level throughout the week.

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A recovery in funding rates is always a welcome change for the market, so last week’s day remains important. In a market like this, where bitcoin continues to struggle above $23,000, there should be a significant shift not only in sentiment but also in the amount of money pouring into the space.

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Bitcoin recharge rates

BTC funding rates return to neutral | Source: Arcane Research

As funding rates recover to neutral levels, this once again puts it on the road to neutrality, something that has eluded Bitcoin for most of the year so far. The trend that started in June has now reached an acceptable point, but the ultimate goal remains to find positive rates if bitcoin continues its bull run.

Bitcoin price chart from TradingView.com

BTC trading below $23,000 | Source: BTCUSD on TradingView.com

Will Bitcoin recover?

Bitcoin is still trading at $22,800, which is an unexpected support level for the digital asset. This level continues to be held tentatively, but it takes a big push to get up from this level. When funding rates recover, fraudulent traders will likely be able to provide the necessary push.

Related Reading: Why Bitcoin Investors Should Pay Attention to the Macro Environment

As for leverage in the bitcoin market, it remains elevated. This means that more and more traders are opening positions on the digital asset. But it also puts them in a precarious position where liquidations can quickly pile up, especially when moving below $22,000.

However, the bullish indicators remain strong, albeit slightly weaker compared to last week. The resistance at $23,000 is not as strong as the bears would like, so the next major resistance is well above $23,500. If bitcoin is able to top the 50-day moving average once again, then it is likely to rise above $24,000 again.

Featured image from The Economic Times, charts from Arcane Reseach and TradingView.com

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Credit : www.newsbtc.com

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