Following bearish pressure over the last week, Bitcoin price has finally broken above its consolidation range. BTC price surged above the $63K mark and has triggered a wave of short-liquidations. In recent weeks, Bitcoin experienced volatility following the highly anticipated halving event, with prices fluctuating unpredictably. Despite this sideways movement, analysts remain bullish about Bitcoin’s price action as on-chain trends turn bullish.
Bitcoin’s Funding Rate Turns Bullish
According to Santiment, Bitcoin’s funding rate is increasing on major exchanges like DyDx and Deribit. The funding rate reflects the cost of holding long or short positions in perpetual futures contracts, which can indicate market sentiment.
A rising funding rate suggests that there are more long positions than short positions, implying bullish sentiment among traders. However, if the rate gets too high, it can indicate that the market is becoming overly bullish, which may lead to a correction.
After last week’s peak of $64K and a sharp rejection, many investors are cautious about history repeating itself this week. During previous market tops, high funding rates have often brought significant price drops. This is why those bullish on Bitcoin want to see FOMO staying low this time and the rate of new short positions keeping pace with or exceeding that of long positions.
Also read: Bitcoin Market Heat: Open Interest and Liquidation Surge!
For a healthy BTC market, it’s crucial that shorts open at the same or a higher rate than longs. This balance can prevent excessive leverage and reduce the risk of a sharp downturn. According to Coinglass data, the current BTC funding rate is at 0.0041% after dropping from the peak of 0.0095%.
All eyes are on U.S. macroeconomic developments this week as numerous data releases are expected. The highlight is the CPI, crucial for the inflation debate and hopes for interest rate cuts for risk assets. A bullish report might confirm a buying trend for BTC price this week.
What’s Next For BTC Price?
The bulls have defended the $60,000 level for Bitcoin but haven’t managed to hold the price above the 200-day exponential moving average (EMA) of $63,304. This highlights a strong contention between the bulls and bears. Currently, Bitcoin trades at $62,745, up over 2.1% in the past 24 hours.
In recent hours, bulls pushed the price above $63K; however, it faced strong selling pressure from bears. The flattish 20-day EMA and the relative strength index (RSI) in positive territory indicate a mixed sentiment among both sellers and buyers. If the $59,600 level fails to hold, the BTC/USDT pair could revisit the May 1 intraday low of $56,500. This level is expected to attract buyers, but if the bears prevail, the pair may drop to the 61.8% Fibonacci retracement level of $54,300.
To prevent further decline, bulls need to push and hold the price above the 200-day EMA on the 4-hour price chart. If they succeed, the pair could rise to $67,800. Overcoming this barrier might trigger a rally to $73,777.
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