The Funding Rate for Bitcoin‘s Futures Perpetual Contract has spiked to 0.035%, marking its highest point since December 5, suggesting increased enthusiasm among speculators. This surge follows Bitcoin reaching a new high of over $109,000 on Monday, mere hours prior to Donald Trump’s inauguration as President.
Earlier this month, the funding rate momentarily dipped into the negative zone, possibly indicating a temporary low point in Bitcoin’s price, as it hovered around $94,000.
Heightened Speculation
When the funding rate is positive, long-term traders often pay short-term traders a fee because they believe Bitcoin’s price will keep rising. Conversely, a negative funding rate means short-term traders pay long-term traders. In a bullish market, Bitcoin usually has a positive funding rate due to traders expecting further price growth. However, too much enthusiasm can overheat the market, leading to price drops and numerous liquidations. Yet, the trend shows there may still be potential for more growth.
Reaching an all-time high of over $109,000, Bitcoin ignited market excitement as data from Glassnode showed the Long-Term Holder Net Unrealized Profit/Loss (NUPL) climbing above 0.75. This suggests a surge in investor optimism and potential greed. Furthermore, the Short-Term Holder profitability also picked up pace, with Bitcoin’s STH MVRV soaring to 1.16, surpassing its 1-year trendline of 1.1, indicating a resurgence in short-term profit-taking activity.
In simpler terms, Ecoinometrics expects a somewhat positive development for Bitcoin. They suggest that there’s about a 54% chance that the cryptocurrency will yield over 10% growth within the next month, largely influenced by a relatively optimistic market atmosphere.
Despite the difficulty of achieving $150,000 by 2025, there are signs pointing towards an ongoing increase. The main drivers supporting this growth trajectory involve consistent institutional investment in ETFs and a positive resolution to the Federal Reserve’s impending policy decision.
Investor Optimism and Policy Speculation
Reaching a new all-time high, Bitcoin’s surge was echoed by rapid growth in other digital currencies, as investors anticipated possible adjustments in policy and regulatory decisions linked to the U.S. presidential transition. The optimism surrounding the robustness of the U.S. economy’s future has additionally fueled positive sentiments.
Currently, Min Jung, a research analyst at Presto Research, has mentioned whispers about a supposedly leaked inauguration speech suggesting a possible Bitcoin investment fund. However, the validity of these rumors hasn’t been confirmed yet. The market is buzzing with speculation and excitement surrounding the upcoming inauguration, which appears to be influencing trading activities.
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2025-01-20 18:50