- BTC has seen negative funding rates for the first time this year.
- On-chain data shows increased selling as many trading positions are exited.
As the cryptocurrency market grapples with the uncertainty that looms when banks resume operations on Monday, bitcoin is [BTC] Funding rates turned negative for the first time since the start of the year, data from CryptoQuant revealed.
According to CryptoQuant’s Jay Bot, negative sentiment has plagued the BTC market since the beginning of the Silicon Valley Bank saga. As a result, funding rates turned negative for the first time this year, reaching levels similar to those seen when FTX collapsed in November 2022.
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Funding rates are the fees traders pay to hold positions in futures markets. When the funding rate goes negative, traders pay more to hold long positions than short positions.
However, Jay Bot said:
“If bad news disappears and bitcoin prices recover, a short squeeze may occur as the overheated short positions are liquidated.”
Source: CryptoQuant
BTC bears take control as market sentiment turns sour
An on-chain assessment of BTC’s performance so far this weekend confirmed investors’ exit from trading positions.
Data from Santiment showed a spike in the BTC Age Consumed metric in the early trading hours of March 11. Investor confidence decreased throughout the trading day, causing the price of BTC to drop.
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A spike in an asset’s Age Consumption metric indicates that many previously unused tokens are now being transferred between addresses. This suggests that the behavior of long-term holders, who are usually known for making careful decisions, has suddenly and sharply changed.
HODLers and experienced traders are known for trading thoughtfully, which is why increased dormant coin activity often coincides with large shifts in market conditions.
Moreso, an increase in age consumed followed by a price decline, as is the case here, marks the formation of a local top that often marks the beginning of a period of price decline.
Source: Santiment
As the price of BTC fell on March 11, exchange inflow increased, according to data from Santiment.
In general, an increase in the number of coins moving into well-known exchange wallets just before a local top may indicate a widespread sell-off.
Sometimes this selloff can be too sudden and too significant for the bulls to handle. In the case of BTC, however, this was nothing out of the ordinary.
Source: Santiment
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