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Bitcoin Funding Rates Turn Negative Amid Short Dominance and Bearish Momentum
The crypto market is witnessing significant selling pressure, with Bitcoin attempting to reclaim the $90,000 level. Analysts are divided on whether this marks the peak of the current cycle or a temporary correction.
- Bitcoin's price action indicates a shift in trader behavior, with many moving to short positions after failed long attempts during the decline.
- Funding rates have turned negative, suggesting a dominance of short positions and indicating a potential market inflection point.
- This funding behavior may signal trader capitulation, which historically aligns with late-stage bottoms in corrections.
Funding Rates and Market Sentiment
- Funding rates dropping below 0.01% suggest short-side dominance; negative rates indicate aggressive short positioning.
- Such shifts often happen deep into a correction and could precede an upside reversal if spot demand increases.
Price Testing Short-Term Supply
- Bitcoin is stabilizing around $87,000 after rebounding from a low near $80,000.
- The downtrend persists as BTC trades below key moving averages (50-day, 100-day, and 200-day) with declining slopes.
- Lack of strong volume support suggests buyers haven't returned decisively.
- Resistance levels are set at $95,000 and $100,000; failure to reclaim these could lead to renewed selling pressure.
- A sustained move above the 100-day moving average would indicate regained bullish momentum.
