The crypto market has started the year 2023 with a remarkable, bullish run. Over the last few days, several assets have recorded significant profits and are starting to pull through the crypto winter.
Most notably, Bitcoin, the market leader and the world’s biggest digital asset, has been one of the top-performing coins this year. In the last seven days, BTC gained by more than 17%, allowing the coin to surpass the $20,000 price mark for the first time since the start of the FTX crisis.
Bitcoin’s impressive price rally has generated much excitement among the crypto community, along with a significant rise in the positive sentiment around the entire crypto market. However, it appears there might be a need for alertness among investors in the coming days.
According to a post by Maartun, a top analyst on the crypto analytics platform Crypto Quant, Bitcoin funding rates have attained their highest values in 14 months. The Crypto Quant contributor further stated that the occurrence of high funding rates such as these usually resulted in Bitcoin experiencing a price pullback.
Funding rates are recurring payments made to either traders in a long or short position, depending on the difference between perpetual contract markets and spot prices.
In essence, these payments serve as a method of maintaining the price of perpetual contracts close to the spot price of an asset – in this case, Bitcoin.
That said, when there are highly positive funding rates on crypto exchanges, it indicates that traders are betting on the BTC/USD market to attain higher prices and are paying to go really long on BTC.
Trading positions such as these can be quite risky, as any slight price drop might lead to high levels of liquidation or force these traders to close their positions.
Therefore, these funding rates are definitely something that all BTC investors should keep their eyes on in the coming days. For now, Bitcoin is holding its ground, having gained by 1.83% in the last 24 hours, according to data by CoinMarketCap.
At press time, the premier cryptocurrency is trading at $20,722.66, with a market cap value of $399.23 billion.
BTC Trading at $20,716 | Source: BTCUSD Chart on Tradingview.com.
According to the popular price prediction site, BitNation, Bitcoin could attain a peak price of $37,307.77 before the years run out. Their price forecast also states that BTC investors should expect an average price of $31,084.84.
However, the team at Tradingbeasts are predicting a rather bearish Bitcoin market for 2023. According to their price projections, BTC is expected to record slight losses all through the year, closing its annual market with a maximum price of $18,339 and an average price of $14,671.
So far, Bitcoin has shown a strong performance in 2023, gaining by over 25% since the beginning of the year. No doubt, the premier cryptocurrency is one asset to look out for in 2023.
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