Here’s the whole story of Bitcoin’s funding rate

Bitcoin took another step this week, with the cryptocurrency surpassing the price point of $ 50,000 and later, $ 52,000. In fact, right now the story “It’s closer to $ 100,000 than $ 0” trumps any other.

The bullish momentum accompanying BTC’s price movements has permeated different parts of the digital asset industry, the same evidenced by the derivatives ecosystem.

Funding rate skyrockets in stock markets


Source: Skew

According to Skew, the BTC funding rate in some derivatives exchanges has reached its highest level since May-June 2019 recently. If the financing rate, on average, is even higher than the rate observed over this period, it is much closer in comparison.

An increase in the funding rate usually indicates that the number of long positions is much greater than the number of shorts. A higher number of long positions implies that the collective market is more bullish than before for another stage of price discovery on the charts.

Bitcoin: Realized volatility is increasing, but implied volatility is decreasing?

Source: Skew

Since the start of November, realized volatility has increased on the chart at a sustained rate. While implied volatility has also charted a similar pattern, since the start of January the same has underscored expectations of low volatility despite the RV continuing to rise, showing movement against expected volatility.

Now, while this is particularly positive for swing pricing, it also opens up the possibility of a sudden downside breakout.

Source: Skew

In addition, the terms structure of Bitcoin’s ATM volatility also seemed to indicate reduced volatility space for the rest of the year, suggesting a steady rise or fall from now on.

However, is the collective trend positive?


Source: Twitter

Here it is also worth noting a contradictory metric. According to Santiment, his weighted sentiment tracker for the world’s largest cryptocurrency was rather negative after Bitcoin rose above $ 50,000. In reality, positive commentary slowed down while social volume also declined after BTC broke said level.

However, it’s important to view these developments with a pinch of salt, as many altcoin supporters may also be responsible for less than positive comments, alongside crypto-skeptics.

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