Bitcoin Shows No Signs of Stopping Amid Funding Rates Hike
Bitcoin surges over $45,000, the highest since April 2022, as the futures market sees record 66% funding rates amid ETF anticipation.
The cost of holding Bitcoin long positions in the futures market has soared as Bitcoin hit over $45,000, its highest since April 2022.
Matrixport data has shown that the global average perpetual funding rate has hit a record 66%annualized in the Asian trading hours.
Perpetuals are futures without an expiry date. They use funding rates to align with the actual market price of cryptocurrency. Positive rates mean higher costs for long positions.
Markus Thielen from Matrixport observed the funding rate reached a record +66%, indicating that people taking long trades pay a high rate to maintain their positions. He noted that the market still looks bullish, as crypto investors and traders expect the approval of a Bitcoin ETF.
High funding rates can be risky for long positions if the market stops rising, it could lead to some massive liquidations and a price drop.
Currently, Bitcoin is trading strong above $45,000. The cryptocurrency went up by 56% in the last quarter of 2023 amid expectations of the U.S. SEC approving Bitcoin ETFs. A decision might be announced soon.
