Reserve Dollar

bullish

Bitcoin

Read

Reserve

The Aug. 5 market plunge reversed Bitcoin’s funding rate for margin positions, potentially setting the stage for a bullish fourth quarter. 
Pseudonymous CryptoQuant analyst ShayanBTC said that Bitcoin’s (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="noreferrer noopener">BTC</a>) early-August decline may benefit the digital asset before this year ends. The dip to $49,000 triggered a massive deleveraging sweep, flushing nearly $1 billion in BTC longs. The slump also wiped out over $1.2 billion in crypto margin positions and reset funding rates to negative. 
As a result, short sellers dominated leveraged positions. According to the CryptoQuant researcher, investors could view the development as a net positive “as it suggests the future markets are no longer overheated.” 
<figure class="wp-block-image size-full">
 <img loading="lazy" decoding="async" width="1664" height="936" src="https://crypto.news/app/uploads/2024/08/GUYU86_XQAA7dQl.jpg" alt="Bitcoin funding rates" class="wp-image-14290091">
 <figcaption class="wp-element-caption">
 BTC funding rates | Source: <a href="https://cryptoquant.com/insights/quicktake/66b32b31b047fb6a0d35e898-Bitcoins-Decline-and-the-Shift-in-Futures-Market-Sentiment-A-Path-to-Potential-R?utm_source=twitter&amp;utm_medium=sns&amp;utm_campaign=quicktake&amp;utm_content=shayanbtc" target="_blank" rel="">CryptoQuant</a>
 </figcaption>
</figure> 
“Smart Money” remained optimistic about markets as Bitcoin whales <a href="https://crypto.news/bitcoin-whales-accumulate-23b-in-btc-amid-market-uncertainty/" target="_blank" rel="noreferrer noopener">padded</a> their holdings by over 404,000 tokens in the last 30 days after last month’s brief ascent to $70,000 and the plunge below $50,000. CryptoQuant data indicated that the accumulation spree coincided with several liquidation events, including Germany’s $3 billion <a href="https://crypto.news/is-germany-done-transferring-their-bitcoin/" target="_blank" rel="noreferrer noopener">offload</a> and over $6 billion in Mt. Gox creditor <a href="https://crypto.news/mt-gox-holds-3b-in-bitcoin-after-bitgo-transfer/" target="_blank" rel="noreferrer noopener">repayments</a>. 
Investors adding BTC to their coffers is usually bullish for the largest cryptocurrency and signals strong market sentiment adopted by long-term investors, especially when funding rates have declined and created more room for upside momentum. 
 You might also like: <a href="https://crypto.news/total-recall-why-the-crypto-community-still-worries-about-the-mt-gox-collapse/"> Total Recall: Why the crypto community still worries about the Mt. Gox collapse </a> 
<h2 class="wp-block-heading" id="bitcoin-could-range-lower-before-an-uptick">Bitcoin could range lower before an uptick</h2> 
While whales bought more BTC, Bitfinex analysts <a href="https://crypto.news/bitfinex-bitcoin-may-restest-48-9k-support/">predicted</a> on Aug. 5 that the token could retest support around $48,900 before charging toward all-time highs again.&nbsp; 
The assertion agrees with historical data showing that Bitcoin typically struggles in August and September. Gains achieved in July were wiped out by macro-driven market fear, but the year’s fourth quarter may bring relief for BTC. 
Before global markets retraced, investors and markets widely expected Federal Reserve rate cuts in September. A dovish outcome at the Federal Open Market Committee meeting next month could direct much-needed liquidity into the crypto market and propel prices. 
 Read more: <a href="https://crypto.news/deja-vu-what-bitcoins-past-patterns-reveal-about-its-post-black-monday-future/"> Deja vu? What Bitcoin’s past patterns reveal about its post-black Monday future </a>

Negative Bitcoin funding rates could be bullish: analyst

Table of Contents

crypto.news

Other articles published on Aug 7, 2024

Ethereum Inflows Reach New High as Spot ETFs See $48M Boost

Polkadot’s Price Dips Sharply

SEC Closed Meeting with Ripple Labs on August 8: Settlement Talks and Potential XRP Price Surge t...

Protecting digital assets: Custodial innovation for institutions | Opinion

Chainlink Bounces Back: LINK Reclaims $10.36 as Daily Active Addresses Hit High

ETFs Halted Excessive Price Drain: Will Ethereum (ETH) Bounce Back to $3000 This Week?

Join our free newsletter for daily crypto updates!