Bitcoin ($BTC) funding rates on major cryptocurrency exchanges are showing a ‘solid sign of capitulation & prices nearing bottom,” as traders are now starting to favor shorting the flagship cryptocurrency over longing it.
Shorting, or short selling, is a trading strategy that speculates the price of an asset is going to decline. In it, a position is opened by borrowing the asset the investor believes the price will drop – in this case BTC – to then sell it to buyers willing to pay the market price, with plans to buy it back later for less.
According to cryptocurrency analytics firm Santiment, the crowd is now starting to favor shorting, leading to bearish funding rates that can “cause liquidations that shoot up prices in a hurry.” The firm shared a chart suggesting that average funding rates dipping negative “typically leads to eventual price rises.”
As reported by Daily Hodl, Santiment has also noted that the number of “buy the dip” mentions on social media channels has dropped significantly, as often the “crowd unanimously call the dip/bottom earlier than the actual dip and the real bottoms forms when the crowd least expects,” represented by low mentions of buying the dip.
As CryptoGlobe reported, a top cryptocurrency strategist that has gained a large following on social media after accurately calling bitcoin’s 2018 bear market bottom above $3,000, has revealed he believes the price of the flagship cryptocurrency will now drop to $28,000.
Bitcoin is, at the time of writing, trading at $35,300 after its price crashed over Russian Vladimir Putin announcing a “special military operation” against Ukraine in what appears to be a full-scale invasion of the country. The move also equities markets, with European indices dropping between 2 and 5% at the time of writing. Russia’s MOEX index was at one point down 45%.
As reported, strategists at JPMorgan Chase led by Nikolaos Panigirtzoglou have earlier this month revealed they see Bitcoin’s current “fair value” at around $38,000, while their theoretical BTC price target is at $150,000.
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