Binance's Neutral Funding Rates Strengthen Bitcoin's Bullish Signal
Funding rates on Binance have been showing an unusual pattern in recent days given Bitcoin's current price levels. With the asset trading in the $110,000–$120,000 range, they remain neutral or negative, although price increases are typically accompanied by excessively positive funding. This highlights that the movement is being driven by spot demand and long-term holders, rather than overextended leverage.
Historically, sharp rate increases have signaled long overhang and an impending correction. Meanwhile, negative readings reflect sell-offs, fear, or the possibility of short squeezes. In this case, moderate and negative readings indicate accumulation and lay the groundwork for further upward movement.
Key observations include divergences, where price increases are not accompanied by rising funding rates. This is considered a more stable scenario, as demand is generated in the spot market. Conversely, when high prices are supported by excessively positive values, the market becomes fragile and dependent on leveraged capital.
Analysts note that the current structure shows no signs of overheating. Persistent negative rates create conditions for sharp upward movements if there is a massive short-covering. In the short term, this increases the likelihood of short squeezes, which could push the BTC price above $120,000.
Analysts believe the market could test the $120,000–$125,000 range in the medium term due to the continued influx of liquidity in the spot market. The main risk remains a breakout of $115,000 with negative rates, which could lead to a correction to the $105,000–$110,000 range.
Source: cryptonews.net
