Just on Wednesday, Bitcoin price surprised all of its users when it sky-rocketed to a record high of $12,303. This happened after two months of slow down but when the price rose it reached a record high.
This was its highest price since August 18 and the investors are rallying for an increased price in the future also. The market has since remained bullish for various reasons.
Firstly, it's the positive sentiment shown by big Corporates like Square, Micro strategy, and Stone Ridge who propagated Bitcoin as a relevant store of value. Their recent move motivated Bullish sentiments in the market and caused the price to rise. This helped Bitcoin's growth move in the right direction and will further help bolster its popularity as a legitimate investment option.
When Bitcoin was lingering around $12,000 throughout August, the prospects didn't look so promising but now that it has successfully surpassed that level. This market trend was reflected across different spectrums and showed positive signs for the future as well.
However, there is one downhill to it that the funding rates are stagnant like before. Initially, also these rates were either flat or negative causing the price to fluctuate between those resistance limits only but now since the market is showing bullish sentiments the same is expected from the funding rates.
The bitcoin market is all breaking out now at this point and this is only causing investors to pull their socks up and prepare for an even bigger price rise in the future.
The funding rates are regulated by market forces only. These perpetual future rates are dependent on the way investors pull and put their money into the market.
So, when the investors are positive about the growth they invest more money into Bitcoin which causes perpetual rates to further elevate. On the other hand, when the market is bearish which means that investors are not willing to put in more money, the rates further decrease causing the price to fluctuate between the given resistance limits.
So, while for two months the price of Bitcoin has been rallying in the same lobby the funding rates also remained negative. Across all the major trading platforms like Binance, Bitfinex, and Deribit funding rates remained negative. If you want to learn more go check bitcoin pro.
After that, on Wednesday PayPal announced its plan to associate with Bitcoin and start offering its users the utility to buy, sell, and hold Bitcoin on PayPal. This caused the price to further increase beyond the $12,000 limit while the funding rate still remained stagnant.
Initially, the reason for this negative funding rate was believed to be a continuous string of negative news over the last couple of months. With the global pandemic taking over the world's economy it was no surprise that Bitcoin also had to suffer through it.
This was one reason for the market's bearish sentiment which caused some traders to pull back from their spending and investing. This further sets the market in a mode of negative rate spiral causing the prices to remain stagnant at the specific limits.
But with PayPal's recent announcement the market sentiment shifted a little bit. Not only did it cause the price of PayPal's stock to rise but it also increased Bitcoin's price as well. This moved the market in a positive direction.
The traders, investors, corporates found a reason to have faith and confidence in Bitcoin trading which means that the number and the amount of Bitcoin trading will only be increasing in the future.
Now, because of this, the funding rates opened at a higher percentage than before and the exchange's ratio of long to short positions fell from 0.79 to 0.67.
Though there is still no positive sign from the market the traders are willing to go for it. They are positive about the future prospects of the cryptocurrency and perhaps the trends seem promising to them. Now, let's see what happens with this trend and in which direction the market will move.
