big time margin call can skyrocket bitcoin price in mid term analyst
Despite the gloomy short term price trend of Bitcoin (BTC), the pattern of liquidations on BitMEX and historical funding rates point toward a possible serious short squeeze in the medium-term.
“High chance BTC bears get margin called big time in coming months.
Funding rates will be your evidence in hindsight,” Bitazu Capital partner Mohit Sorout said.
On March 12, a huge drop in price liquidated over a billion dollars in Bitcoin long contracts, causing BTC to drop to as low as $3,600.
A similar squeeze could occur against bears or shorts in the upcoming months, which may cause a strong upsurge.
The bitcoin market is now showing peak fear, wait until it subsides
Amid the coronavirus pandemic and rising jobless claims across the globe, investors are expressing fear towards the stability of all asset classes including stocks, cryptocurrencies and precious metals.
It has resulted in panic-driven selling throughout March, and while Bitcoin has rebounded since falling below $4,000, prominent technical analysts like DonAlt have identified the $4,000 to $5,000 range as a potential retest area for BTC in the short-term.
The two indicators that traders are currently observing to predict the medium-term price trend of BTC are the funding rate of BTC futures contracts and the liquidation pattern on BitMEX.
On a perpetual swap, which is a futures contract with no expiration date, a system called funding is used to balance the market.
Simply put, when there are more investors shorting Bitcoin or expecting it to go down, the rate of funding turns negative.
Then, shorts have to pay long contract holders a portion of their position.
For instance, as of April 16, the funding rate on BitMEX is 0.0564%.
This means short contract holders have to compensate longs with 0.0564 percent of their position three times in a day.
Read the full topic at
https://cointelegraph.com/news/big-time-margin-call-can-skyrocket-bitcoin-price-in-mid-term-analyst
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“High chance BTC bears get margin called big time in coming months.
Funding rates will be your evidence in hindsight,” Bitazu Capital partner Mohit Sorout said.
On March 12, a huge drop in price liquidated over a billion dollars in Bitcoin long contracts, causing BTC to drop to as low as $3,600.
A similar squeeze could occur against bears or shorts in the upcoming months, which may cause a strong upsurge.
The bitcoin market is now showing peak fear, wait until it subsides
Amid the coronavirus pandemic and rising jobless claims across the globe, investors are expressing fear towards the stability of all asset classes including stocks, cryptocurrencies and precious metals.
It has resulted in panic-driven selling throughout March, and while Bitcoin has rebounded since falling below $4,000, prominent technical analysts like DonAlt have identified the $4,000 to $5,000 range as a potential retest area for BTC in the short-term.
The two indicators that traders are currently observing to predict the medium-term price trend of BTC are the funding rate of BTC futures contracts and the liquidation pattern on BitMEX.
On a perpetual swap, which is a futures contract with no expiration date, a system called funding is used to balance the market.
Simply put, when there are more investors shorting Bitcoin or expecting it to go down, the rate of funding turns negative.
Then, shorts have to pay long contract holders a portion of their position.
For instance, as of April 16, the funding rate on BitMEX is 0.0564%.
This means short contract holders have to compensate longs with 0.0564 percent of their position three times in a day.
Read the full topic at
https://cointelegraph.com/news/big-time-margin-call-can-skyrocket-bitcoin-price-in-mid-term-analyst
Follow me on
Twitter: https://twitter.com/cryptoexpert20
If you wont me to post your cryptocurrency article on my blog From the link
https://www.fiverr.com/cryptoexpert20/post-your-cryptocurrency-article-on-my-blog
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