Bitcoin currently appears to be taking a breather after achieving a new all-time high (ATH) above $109,000 earlier this week. So far, the asset has seen a slightly reduced upward momentum with the price just hovering above $104,000.
However, despite the slowing upward momentum, Bitcoin’s recent performance has prompted renewed interest in the market. CryptoQuant analyst Burak Kesmeci has recently shared insights into Bitcoin’s price behavior and key market indicators, shedding light on potential future moves.
In a recent post on the CryptoQuant QuickTake Platform, Kesmeci’s analysis focused on Binance Bitcoin Funding Rates, a metric that provides notable clues about market sentiment and dynamics.
By reviewing historical data from previous bull cycles, he identified three distinct phases that can serve as a framework for interpreting the current market environment.
According to Kesmeci, during the 2020-2021 bull run, Binance Bitcoin Funding Rates moved through three distinct phases:
Phase 1 (July 2020): Funding rates remained stable at 0.01 for weeks before demand surged. This phase acted as the “calm before the storm,” leading Bitcoin from $9,000 to $12,000 as funding rates rose to 0.10.
Phase 2 (November 2020): After an initial rally, Bitcoin experienced a correction. Funding rates briefly turned negative before flipping positive, supporting Bitcoin’s climb from $12,000 to $19,000.
Phase 3 (December 2020): As Bitcoin surpassed its previous highs and crossed the $60,000 mark, funding rates climbed significantly, reflecting strong market support.
Currently, Kesmeci notes that Binance Bitcoin Funding Rates are at the baseline level of 0.01—consistent with the early stages of a bull cycle. The analyst wrote:
Analyzing recent data, I believe we’ve completed the first two phases of this bull cycle. For the third phase, I’ll be closely watching if the Binance Bitcoin Funding Rates exceed 0.01.
The analyst mentioned that a sustained rise above the 0.01 level would suggest heightened futures market activity and could lead to another significant upward move.
However, Kesmeci also cautions that elevated funding rates are often unsustainable, and markets tend to correct through “long squeeze” events that restore balance.
In a separate analysis, another CryptoQuant analyst TraderOasis explored several critical metrics, including the Coinbase Premium Index, open interest, and funding rates. These indicators give a picture of Bitcoin’s market health and potential direction.
TraderOasis highlighted a divergence between the Coinbase Premium Index and Bitcoin’s price movement. While the asset reached a new peak above $109,000, the Coinbase Premium Index formed a lower high. This lack of alignment raised concerns about the sustainability of the current price trend.
Moreover, a divergence between open interest and price also suggested that the market might lack the robust foundation needed for continued upward momentum. According to TraderOasis, a healthy uptrend requires these metrics to be more closely aligned, which would signal strong investor confidence and a stable market structure.
Looking at funding rates, TraderOasis observed a recent bearish sentiment among traders. However, he noted that such conditions often precede sharp price movements.
The analysis suggested the possibility of an initial upward spike to shake out bearish positions, followed by a subsequent pullback. This pattern, if realized, could set the stage for a more sustainable long-term uptrend.
Featured image created with DALL-E, Chart from TradingView
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