Bitcoin funding rate turns neutral on top exchanges: what next?
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The Bitcoin futures funding rate has declined to neutral levels on the three largest exchanges — Binance, Bybit, and OKX. This shift suggests that traders are currently undecided about Bitcoin's next move, a departure from the strong bullish sentiment observed in late 2024.
The funding rate measures periodic fees exchanged between long and short traders in the futures market. A positive rate indicates bullish dominance, while a negative rate signals that short sellers are in control.
With the latest BTC price consolidation, market enthusiasm has cooled, and the 7-day simple moving average (SMA) of the funding rate has returned to 0%, signaling neutrality in market positioning.
Historically, Neutral Funding Rates Have Preceded Bullish Moves
A look at past trends reveals that Bitcoin has typically followed up neutral funding rate conditions with a rally. Previous instances during this bull cycle saw BTC rebounding strongly whenever the metric dropped to this level. This behavior can be attributed to liquidation dynamics in the futures market. During highly bullish periods, excessive long positions can trigger a long squeeze, leading to sharp corrections. Conversely, a neutral funding rate means both long and short traders are equally vulnerable, making it easier for Bitcoin to regain bullish momentum.
Bitcoin Price Outlook
Currently, Bitcoin is trading around $97,200, down more than 2% over the past week. The neutral funding rate suggests a potential inflection point, with BTC either resuming its uptrend or seeing further consolidation. If Bitcoin breaks above key resistance levels, traders could interpret this as a signal for renewed bullish momentum, particularly if on-chain metrics confirm strong accumulation. However, if bearish pressure persists, BTC may remain in a sideways range before its next directional move.
Key Levels to Watch
Support: $95,000 – Psychological support, recent local lows; Resistance: $100,000 – Key psychological barrier, previous cycle highs. Upcoming Market Catalysts: Tuesday – Wednesday: Federal Reserve Chair Jerome Powell's testimony before Congress; Wednesday: US CPI Inflation Report. Traders will closely watch macroeconomic events, as interest rate expectations and risk sentiment shifts could influence Bitcoin’s trajectory.
Historically, Neutral Funding Rates Have Preceded Bullish Moves
A look at past trends reveals that Bitcoin has typically followed up neutral funding rate conditions with a rally. Previous instances during this bull cycle saw BTC rebounding strongly whenever the metric dropped to this level. This behavior can be attributed to liquidation dynamics in the futures market. During highly bullish periods, excessive long positions can trigger a long squeeze, leading to sharp corrections. Conversely, a neutral funding rate means both long and short traders are equally vulnerable, making it easier for Bitcoin to regain bullish momentum.
Bitcoin Price Outlook
Currently, Bitcoin is trading around $97,200, down more than 2% over the past week. The neutral funding rate suggests a potential inflection point, with BTC either resuming its uptrend or seeing further consolidation. If Bitcoin breaks above key resistance levels, traders could interpret this as a signal for renewed bullish momentum, particularly if on-chain metrics confirm strong accumulation. However, if bearish pressure persists, BTC may remain in a sideways range before its next directional move.
Key Levels to Watch
Support: $95,000 – Psychological support, recent local lows; Resistance: $100,000 – Key psychological barrier, previous cycle highs. Upcoming Market Catalysts: Tuesday – Wednesday: Federal Reserve Chair Jerome Powell's testimony before Congress; Wednesday: US CPI Inflation Report. Traders will closely watch macroeconomic events, as interest rate expectations and risk sentiment shifts could influence Bitcoin’s trajectory.