Bitcoin Set To Enter $30-35k Range

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As noted by a top Bitcoin analyst, the leading cryptocurrency has been trading in a $30-50 range over the past few days as investors have become indecisive. Some think that this price action may stem from the news that the U.S. CFTC is charging BitMEX, which is forcing investors to close their positions on the leading derivatives platform.

Trends in the Bitcoin futures markets suggest that it may be bulls that soon take the lead.

Derivatives tracker ByBt is currently reporting that most BTC futures markets are currently printing negative funding rates. The funding rate is the fee that long positions pay short positions on a regular basis to ensure that the price of the future is around the price of the underlying spot market.

Negative funding rates suggest that short holders are more aggressive in their positioning than long holders. While it may seem like this means that Bitcoin may continue its descent due to the prevailing ask, this is not often the case.

Bitcoin often outperforms after a period of negative to neutral funding rates as shorts are under pressure when they have to pay to keep their positions open. The vice-versa is also true: that’s to say, when the funding rates of Bitcoin futures are extremely positive, the cryptocurrency often performs well in the days that follow.

To further contextualize this, the funding rate on OKEx currently is 0.02% per eight hours. This may not sound like a lot but when positions are leveraged and when periods of consolidation stretch out to many days and weeks, this adds up, incentivizing short holders to close their positions.

Fundamentally, Bitcoin is also in a position where it should continue its ascent as per some analysts.