Bitcoin’s decline comes amid the fact that funding prices for leading crypto-asset futures platforms have been reset. The funding rate is the recurring fee that long positions pay for short positions in order to keep the price of the future at the spot price. High funding rates, such as those seen on Saturday, have signalling a correction to many on the weekend.
Cryptocurrency may have seen more setbacks, some experts say.
Bitcoin Set to Drop Lower?
Not many analysts are persuaded that the bitcoin shakeout is being achieved after a cryptocurrency drop of almost 30% inside 48 hours.
Commenting on the latest market activity and what is going to come next, a crypto-asset analyst recently said:
“Still think we could use another drop lower to really take out some liquidity to fuel the next leg up to $50k+”
Chart of BTC's price action over the past few months with an analysis by crypto-asset naalyst HornHairs (@CryptoHornHairs on Twitter). Source: BTCUSD from TradingView.com
On-Chain Trends Remain Bullish
Given the decline in Bitcoin, the on-chain dynamics in this sector remain bullish. Aleks Larsen, a venture capitalist at Blockchain Capital, told Bitcoin about HODLer trends:
“6/ Looking pretty good for growth rates in the HODLer segment! Nice and steady growth for BTC through the bear market. Retail is starting to pop in but for most of 2020 this was institutionally driven – less additional holders, but much larger position sizes.”
Grayscale Investors is now looking forwards to reopening private placements for its blockchain investment trusts.
Analysts noticed in December that Bitcoin had underperformed whenever private placements were closed. The re-opening of these trusts to institutional and accredited players can lead to higher prices as capital floods invade space.
162 Interactions, 6 today