Share this article
Bitcoin Holds Above $66K, but Elevated Funding Rates Call for Caution
Elevated funding rates often pave the way for temporary price pullbacks
Updated May 11, 2023, 5:27 p.m. Published Oct 21, 2021, 10:26 a.m.
Make us preferred on Google
Bitcoin remains on the offensive, thanks to ProShares futures-focused Bitcoin Strategy ETF’s strong debut on the New York Stock Exchange earlier this week. The cryptocurrency bounced to $66,400, having found bids near $64,000 during the Asian hours.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
- Analysts foresee a rally toward $86,000 in the coming weeks. However, it may not be a smooth ride, as the derivatives market is beginning to show signs of overheating – often a recipe for price pullbacks.
- Bitcoin’s average funding rate or the cost of holding long positions in the perpetual futures listed on major exchanges, including Binance, has risen to 0.06% – the highest in at least six months, according to data provided by Bybit. Exchanges calculate funding rates every eight hours.
- On retail-focused exchange Bybit, the funding rate surged as high as 0.14% early today.
- “Participants need to pay close attention to the exchange funding rates represented by Bybit, where retail investors are more concentrated, and excessive rates may trigger another short-term price downturn,” Babel Finance mentioned in the weekly research note published Monday.
- While funding rates seen at press time are significantly higher than those seen before the early September sell-off and the mid-May price crash, they are not yet as high as the ones seen during the first quarter bull frenzy.
- Although a positive funding rate represents an upbeat market mood, a very high reading indicates that the leverage is heavily skewed on the bullish side and often paves the way for price pullbacks.
- Stack Funds COO and co-founder Matthew Dibb said elevated funding rates might inject volatility into the market. “Our expectation is that capital will rotate into ethereum and major altcoins while bitcoin cools off slightly,” Dibb added.
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
BNB rises 2.5%, nears $900 mark as prediction market growth signals utility expansion
A new physically backed BNB exchange-traded product launched on Nasdaq Stockholm, adding to existing investment options.
What to know:
- BNB token climbed 2.5% to $89e, approaching the $900 resistance level, with increased trading volume suggesting fresh buying interest.
- A new physically backed BNB exchange-traded product launched on Nasdaq Stockholm, adding to existing investment options like Grayscale's pending ETF filing.
- BNB Chain saw significant growth in prediction markets, with platforms like Opinion Labs logging over $700 million in 7-day trading volume and cumulative trading volumes crossing $20 billion.
Top Stories
