Key Points
- Bitcoin’s funding rates have dropped, indicating a shakeout of over-leveraged bullish traders.
- The market mood has shifted from “extreme greed” to “greed”, suggesting a potential correction.
Bitcoin [BTC] saw a retreat from its previous all-time highs (ATH) this week, falling by 3.23% to the $67k zone.
Market participants are anxiously anticipating a rebound to $73k, a level last reached in mid-March.
Market Indicators Still Positive
Despite the current stagnation, some market indicators for Bitcoin are still positive.
J. A. Maartunn, a contributor at on-chain analytics platform CryptoQuant, noted a sharp drop in Bitcoin’s funding rates over the week.
These drops typically signify a shakeout of over-leveraged bullish traders.
Signs of Market Correction
When BTC reached its new ATH in mid-March, the funding rates spiked, indicating an overheated market.
Now, with normalized funding rates and prices still around $67k, there is potential for fresh longs to enter the market.
An 11% decline in Open Interest (OI) in Bitcoin futures over the week also suggests the exit of over-leveraged long positions.
The market mood has shifted from “extreme greed” to “greed” as per the Crypto Fear and Greed Index.
This usually indicates that the market is due for a correction.
Bankrupt crypto-lender Genesis has finished selling more than $2 billion of its Grayscale Bitcoin ETF (GBTC) shares.
This could potentially slow down GBTC outflows, allowing other ETFs to offset this with high inflows, potentially leading to Bitcoin’s rise again.
