- A high funding rate in the futures market is currently affecting the Bitcoin price performance.
- The number of whales with 100,000 BTC keeps increasing and takes over 2% of Bitcoin supply.
Bitcoin managed to gain momentum during Friday’s trading session after weeks of sideways movement. The price rose as high as $61,233 on Coinbase. However, the bears do not seem to have given up yet as the Bitcoin price was rejected $500 under the ATH and fell under $60,000 again. At the time of publication, Bitcoin was trading at $59,652 with a slight loss of 1.5% on the daily chart. On the weekly and monthly charts, BTC has gained 4.5% and 3.1% respectively.
Trader Byzantine General has provided an analysis of the market and its fundamentals via Twitter. He claims that Bitcoin is still far from its peak and explained that in recent days the cryptocurrency’s price action has been influenced by the futures market.
As the image below shows, the funding rate has been very high. Therefore, traders with long positions have had less incentive to hold. Byzantine General expressed that bets on a rise in the Bitcoin price are “crowded,” adding:
However high funding is only dangerous when the market is driven purely by derivatives greed. But there is also a pretty damn strong spot bid. So maybe it’s not that problematic.
Next, Byzantine General stated that Grayscale Bitcoin Trust (GBTC) is closed. While the product caused a significant increase in demand for BTC in late 2020 and early this year, there is currently a lack of participation.
This has been reflected in the cryptocurrency’s performance. At the end of April, Grayscale will release a large amount of bitcoin that is “locked” in the product. At that time, demand for the cryptocurrency could get another boost.
Bitcoin investors hodl their coins
In terms of fundamentals, indicators point to further appreciation. Bitcoin’s hash rate and difficulty are at record highs with an upward trend, as are miners’ profits, and the value of transactions in USD. The trader stated:
(…) on-chain metrics suggest that we’re nearing overbought/euphoria levels. One of my favs is reverse risk which basically shows long term hodlers confidence. It’s getting pretty high but doesn’t scream “top” just yet.
With regard to the mining sector, the trader concluded that miners stopped selling, causing a low outflow of BTC going into the market. In fact, over the past few days, miners have started to accumulate BTC which is a highly bullish indicator.
4/ Are #Bitcoin miners selling? I don't think so.
We saw increased outflows in the run up to $40, but miner position change has turned back positive.
— Rafael Schultze-Kraft (@n3ocortex) April 6, 2021
On the other hand, Glassnode co-founder Rafael Schultze-Kraft looked at the metric “Bitcoin’s Coin Days Destroyed,” used to measure the number of coins “spent” and stated that it is declining. Schultze-Kraft’s findings are consistent with those of Byzantine General, according to which BTC is far from its peak. He stated:
Despite $BTC prices above $50k, 3-month CDD at low levels and recently declining. Old hands extremely strong here, HODLers showing conviction and doing what they do best.
Finally, research firm Santiment stated that there has been an increase in the number of whales with more than 100,000 BTC. The percentage of Bitcoin’s supply held by whale addresses with 100k or more has risen from 0.76% 11 weeks ago, to 2.20% today, an 11-month-high. Meanwhile, the smaller 1k-100k $BTC addresses have dropped from 42.4% to 39.5% in the same 11 weeks.