June 7, 2021
The price of Bitcoin and Ethereum has taken a bit of a hit in the last 12 hours after a massive washout in leveraged trading. For perspective, there has been over $1.45B in liquidations in the past 12 hours, with over $720M of those liquidations coming from traders speculating on long positions in Bitcoin.
It is is our view that the market has flipped bullish given that funding rates are now neutral.
Generally speaking, when funding rates are high - it means that there are too many crypto futures traders that have opened up leveraged long positions, which typically equates to a big shakeout across the market. When funding rates move down to being neutral, it means that traders are not in open positions and the market is fearful.
From a technical perspective, we are still ranging between the channel depicted below. If we do not break out, or breakdown - this will create an environment where speculators will continue to trade altcoins which could push prices of Ethereum, Chainlink and other alts higher.
From a mid to long term perspective, we remain bullish and can see on-chain that institutional investors are continuing to buy and accumulate Bitcoin. An example of this can be highlighted by the recent deposits of $427M and $386M of USDT on exchanges. This kind of size has typically lead to higher prices after a market-wide correction.
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