- Bitcoin bears took charge of its price after it peaked at $10,600
- BTC plunges lower while analysts expected an upside move after breaking over $10,500
- Bitcoin could soon bounce back, according to derivatives data
Bitcoin News Today – Bitcoin started a sharp upward move over the weekend to test a new weekly high. After the digital currency peaked at $10,600 on Saturday evening, the bears showed up and took control of the digital currency. At press time, the world’s most dominant digital currency is changing hands close to $10,400, having plunged to as low as $10,200 as sellers entered the market suddenly.
Bitcoin Moves in the Opposite Direction of Analysts’ Expectations
There was a significant diversion from what analysts were expecting from the digital currency just a couple of hours before the move. After a break over the $10,500 mark, many were expecting the digital currency to surge towards the $11k mark, considering it has been trading in a tight range for some time.
While this did not play out, there are signs that the present correction is one that is too aggressive. This means there is a higher chance that the price of Bitcoin would bounce back from there.
Bitcoin (BTC) Price Today – BTC / USD
Derivatives Data Suggest BTC Could Soon Bounce Back
It seems that derivative traders pushed the price of the digital currency on Sunday morning. According to a digital currency-derivatives tracking platform – ByBt – most Bitcoin margin trading platforms have negative funding rates at the moment. The funding rate is the fee that longs pay shorts to regularize the price of the derivative to the price of the underlying asset. A negative fund rate means that the shorts are pushing the price, as the derivative is trading below the spot market.
At the moment, the funding rate of BitMEX is negative at 0.9328 percent per eight hours, which is way below the baseline of 0.01 percent per eight hours. Other top trading platforms, such as Huobi and OKEx, are also seeing negative funding rates.
Remarkably, the futures markets of Ethereum are also printing negative funding rates, which is something that only happens when derivatives sellers are putting on extremely heavy pressure. Negative funding rates usually show up before BTC bounces. At the same time, very high positive funding rates are usually seen before the digital currency undergoes a correction.
Now, it seems all eyes are on the legacy markets. If legacy markets open red in the coming hours, like the foreign currency market and the stock market, bears may be able to keep up the downward pressure. However, as seen over the past couple of weeks, the plunge of legacy markets has a contrary effect on the price of Bitcoin (BTC) and other digital currencies.