According to a crypto analyst, two important indicators in Bitcoin trading, the funding rate and the 3-month annualized basis rate, suggest that the price of Bitcoin may soon rise. Will Clemente, co-founder of Reflexivity Research, stated in a post on X on May 7 that Bitcoin’s funding rate and Basis rate have cooled off after briefly reaching negative readings, indicating that the price may be consolidating before an upward movement. The funding rate is commonly used to gauge trader sentiment in the cryptocurrency market, with a positive rate indicating confidence in the price increasing. Currently, the OI-weighted funding rate is 0.0091%, recovering from a negative rate of -0.0050% on May 4. The slight increase in Bitcoin’s price, rising by 1.11% to $62,361, also aligns with this shift in the funding rate. However, liquidation data suggests that futures traders are still leaning bearish and anticipate a near-term price drop. On the other hand, Bitcoin’s annualized basis rate has increased to the higher end of the 5-10% neutral range on major exchanges such as Binance, OKX, and Deribit, which traders often interpret as a neutral-to-bullish signal. It is important to note that this article does not provide investment advice and readers should conduct their own research before making any decisions.
Why Bitcoin's bullish potential could be indicated by the recent cooling off of 2 key indicators