San Francisco, California – Bitcoin’s funding rate has shown a bullish signal despite potential resistance from the Coinbase Premium Index, indicating a delay in the cryptocurrency’s rise to new highs.
Since mid-May, the funding rate for Bitcoin has remained low, suggesting subdued investor expectations. This could actually be beneficial for Bitcoin’s price, as the funding rate reflects the cost of holding an open contract in the market. A positive funding rate indicates that the perp price is trading above the index value, while a negative rate suggests the spot price is higher than the contract price. Currently, Bitcoin’s funding rate stands at $0.01%, lower than previous weeks.
The low funding rate combined with declining prices may indicate a fading interest in Bitcoin by buyers. This scenario could potentially lead to a delay in Bitcoin reaching $70,000. Additionally, the condition of the Coinbase Premium Index, which measures the difference between BTC’s price on Coinbase exchange and other platforms, poses a challenge for Bitcoin’s immediate growth. A high index value suggests strong buying from U.S. investors, while a decline indicates increased selling pressure in the country.
Although the funding rate and Coinbase Premium Index present bearish signals, there are still potential opportunities for a breakout in Bitcoin’s price. Analysts suggest that an increase in funding rate could lead to a surge in Bitcoin’s value, with the Coinbase Premium Index serving as a key indicator for market movements. Evaluating investor capitalization provided by Glassnode, the metric aligns closely with Bitcoin’s current price, indicating a critical juncture for the cryptocurrency.
Despite the potential for a price correction based on investor capitalization metrics, if Bitcoin manages to exceed expectations, it could retest $70,000. As volatility around Bitcoin remains low, prices are expected to fluctuate within a narrow range. Looking ahead, a positive shift in the mentioned metrics could pave the way for Bitcoin to reach its all-time high by the end of June.