Bitcoin has been struggling to maintain a bullish movement in recent months due to fears and economic woes. While bearish sentiment remains sticky as macro uncertainty looms over crypto and traditional markets, it has led to a perpetual funding rate signal that points toward a potential market bottom for bitcoin, analysts at K33 Research.
Correlations between BTC and the S&P 500 have grown to 23-month highs as macro dictates momentum ahead of the first cut. A persistent bearish sentiment in perps has flashed a rare but solid signal, making a compelling case for aggressive exposure
Monthly funding rates hitting negative levels have previously coincided with market bottoms. Since 2018, after 30-day average rates have flipped negative, average 90-day returns came in at 79%, with median 90-day returns at 55%, according to K33 data.
The negative funding rates have been met with a rise in open interest toward the highest levels since late July, which in combination exposes the market to short squeezes ahead, the analysts said
“This dynamic supports our bullish end-of-the-year thesis, adding to a FED pivot, U.S. Election, FTX repayments, seasonality, delayed halving effects and a concluded supply overhang,” Lunde and Zimmerman added.
Meanwhile Bitcoin is currently trading at $56,718, according to The Block’s Bitcoin Price Page, down 1% over the past 24 hours and 3% over the past month. However, the foremost cryptocurrency remains up by 34.2% year-to-date.
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