Analysts say that the coin is likely to press higher in the hours and days ahead. One crypto-asset analyst shared the chart below early, showing that the cryptocurrency’s futures markets are clearly bearish at the moment. The issue is, according to the analyst, many of these shorts are bearish while the funding rate is also negative. This strongly increases the chances that Bitcoin will undergo a short squeeze, driving prices rapidly to the upside.
“Meanwhile funding has been consistently negative the past couple of days on Binance and the L/S ratio has also been going down too (more shorts). This looks to me like a bunch of over-leveraged shorts are underwater.”
The funding rate is the fee that long positions pay short positions on a recurring basis to keep the price of the future to the price of the spot market. Negative funding rates combined with increasing prices increases the chance that a short squeeze takes place.
Election uncertainty could result in this scenario not playing out.
Multiple analysts have noted how uncertainty around this election could result in movements in markets like the dollar and Bitcoin due to differing economic/fiscal policies.
For one, BTC has already bounced $400 and crashed $300 due to the election.
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