Bitcoin Funding Rates Decline 9%: Will Bearish Sentiment Continue?
Bitcoin’s funding rates have decreased by 9% in March, with prices struggling below $85,000. Persistent selling pressure has driven BTC down nearly 20% this month, amidst macroeconomic uncertainties. Analysts suggest that if trends continue, funding rates could turn negative, reinforcing bearish sentiment. Immediate support levels are crucial for a potential recovery in BTC’s price.
Bitcoin (BTC) experiences strong resistance beneath the $85,000 threshold, with market sentiment characterized by volatility and fear. After dipping below the critical $90,000 level, BTC briefly fell below $80,000, as buyers struggle against substantial selling pressure, inhibiting any sustained recovery. Despite attempts to stabilize prices, the bearish outlook remains dominant.
According to CryptoQuant data, the average Funding Rate SMA (30) has diminished by 9% since early March, demonstrating that traders are increasingly expecting further declines. This downward trend in funding rates supports the notion that short positions are substantially gaining traction, reflecting the prevailing bearish sentiment that has shaped market dynamics in recent weeks.
The current outlook for Bitcoin is challenging, as it trades at its lowest levels since late 2024. Investors have faced ongoing selling pressure, contrary to expectations for a swift and vigorous rally in 2023. Factors such as trade war fears and macroeconomic instability have exerted significant pressure on both crypto and stock markets, perpetuating a downturn across risk assets.
Since the start of March, Bitcoin has declined almost 20%, with no evident signs of a recovery. The bearish momentum is solidifying, as BTC remains unable to breach critical resistance levels. Nevertheless, Bitcoin’s fundamentals appear resilient, with institutional adoption progressing and potential catalysts for improvement, such as strategic cryptocurrency reserves proposed by US President Trump.
Analyst Axel Adler disclosed on X that the decreasing funding rates could lead to a negative shift if the trend continues, indicating amplified bearish sentiment and heightened short positioning among traders. To reverse the prevailing trend, bulls must reclaim essential price points, pushing BTC back beyond $90,000 to restore momentum. Otherwise, sustained negative funding rates could exacerbate the downturn.
Currently, Bitcoin is trading at $83,600, struggling below significant moving averages. The asset has yet to regain its 200-day moving average at $84,100 and the 200-day EMA at $85,500, leading to bearish pressure. For Bitcoin to regain a bullish stance, buyers must elevate the price above $86,000 and reclaim the critical $90,000 mark.
Failure to achieve these key price levels may increase the likelihood of further drops. If Bitcoin cannot maintain the $83,000-$84,000 range, it risks dropping below $80,000, which could spark a new wave of sell-offs. With prevailing macroeconomic uncertainties, bulls must act swiftly to reclaim control to avert further declines. The immediate future will be pivotal in dictating Bitcoin’s short-term trajectory.
In summary, Bitcoin is currently facing significant downward pressure, with critical resistance levels prohibiting recovery efforts. The drop in funding rates reflects increasing bearish sentiment, as traders anticipate further declines. Moreover, macroeconomic uncertainties weigh heavily on market confidence. For Bitcoin to reverse the current trend, it is imperative for bulls to reclaim essential price levels, particularly above $90,000; otherwise, the outlook may remain bleak for the foreseeable future.
Original Source: bitcoinist.com
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