A key indicator of the bitcoin price indicates the caution of professional traders
A key indicator of the bitcoin price indicates the caution of professional traders Bitcoin price appears to have taken a small long position after the collapse in March. This indicator may be a harbinger of a correction or two weeks, since the indicators mainly measure the behavior of futures traders and not the performance of the BTC price.Futures funding rates are always in a negative rangeChances are, that bitcoin will default on its long-term futures contracts. This is evidenced by the fact that open interest on futures contracts is usually negative. On March 12, for example, open interest on 1,866 BTC futures contracts ranged from $ 103,550 to $ 576,070.As shown above, the funding rate for perpetual futures was negative, which indicates that buyers were demanding more money for their deposits. Perpetual contracts they are used for bullish strategies, so they are often considered a safe haven.The graph above also shows that the funding rate for bitcoin futures became positive when the funding rate for perpetual futures was negative. This indicates that the demand for perpetual contracts is it is significantly higher than the supply of BTC.It is also important to keep in mind that the funding rate for perpetual futures has remained negative for most of the last three months. Perpetual contracts, also known as reverse swaps, they do not have a basis of supply for BTC.Although the demand for such contracts could be significant in the near future, until the funding rate becomes positive, it will be difficult to predict how high bitcoin will fall in the future.Increasing bullish sentiment will increase the likelihood of a short-term pullback or growthHowever, positive sentiment will also inevitably lead to an increase in the price of BTC in the near future. In this case, a short-term pullback will be most likely, as the funding rate is the same as it is now.If BTC continues to rise in price, the level of funding will be the opposite of what it is now, and this will be a positive variable. The opposite is also possible if the funding rate turns positive, as this represents a further increase in demand.Finally, if the bitcoin price is able to overcome $ 11,000, the level of funding will be -$ 11,000, not including $ 11,000 per BTC, which represents a potential milestone. If this level persists, it will be one of the most important levels in the game. negative funding rates. Failure to hold $ 11K would mean negative funding rates again, forcing buyers to sell at a premium. If BTC surpasses $ 11,000 again, it will mean that the market is overheated.We recommend you to read the article: "What if we superimpose today's bitcoin chart on the one I drew in 2018 year? How I predicted growth in 2021 three years ago"You can share your opinion in the comments section!