Bitcoin (BTC) fell again to below $ 60,000 a day after reaching its all-time high of $ 61,950 on March 14. However, chain metadata show that the uptrend is likely to continue in the short term.
Another measure that gives positive signals for BTC in the short term is the increase in the number of stablecoins transferred to exchanges.
Bitcoin Price Index: How much is 1 Bitcoin in TL? (BTC TL)
Even though the high funding rates and the crowded market cause the price to drop, the additional capital transfer to the market can support Bitcoin’s momentum.
Why didn’t Bitcoin hold on to $ 60,000?
As Bitcoin starts its record-breaking price discovery, interest in the market naturally rises.
The currently highly liquid market offers an ideal environment for whales and high-income investors to profit from their positions.
The anonymous investor and technical analyst filbfilb said that before the decline, high funding rates in the futures market and an increase in the number of Bitcoins invested in the exchanges were detected.
The Bitcoin futures market uses a mechanism called “funding” to provide incentives to investors based on the balance in the market.
For example, if there are many buyers or long positions in the market, incentives are provided to short positions and sellers. In this case, the funding rate increases, making it more costly for investors to take long Bitcoin positions.
The funding rate for BTC futures hovered between 0.05 and 0.1 percent before the decline. This rate is five to ten times the normal 0.01 percent funding rate. Filbfilb, he explained as follows:
“Bitcoin faced a temporary selling pressure after high funding rates, an increase in the number of BTC transferred to exchanges, and the rise over the weekend. I think people thought it would be different this time.”
Since whales usually transfer BTC to exchanges when they want to sell, the decrease is thought to be due to the increase in the number of BTC entering the exchanges.
Therefore, both the increase in the selling pressure of the whales and the increase in the funding rates may have contributed to the decline experienced today.
Stablecoin entries can support the BTC rally
Although the rally was stalled, CryptoQuant data shows that the number of stablecoins transferred to exchanges is on the rise again.
In the crypto market, investors often hold their savings in stablecoins such as Tether (USDT) and USDC rather than cashing them in.
Cash deposits on exchanges can take three to seven days, and when investors want to re-enter the crypto market, transferring money from their bank accounts to the exchanges can be a challenge.
Therefore, the increase in the number of stablecoins invested in exchanges indicates that investors may want to buy Bitcoins again.
CryptoQuant CEO’su Ki Young Ju, stated that:
“Stablecoins are transferred to the exchanges very frequently. Each ETH block (15 seconds) has 100-287 deposits of stablecoins. I think BTC and ETH will rise further in the short term.”