- Bitcoin’s funding rate has continued to decline.
- BTC also saw a decline in its assets as it fell below the $42,000 price range.
Recently Bitcoin [BTC] fell below the $42,000 price range and there is a possibility of further decline if the current downtrend continues. The price drop has resulted in a drop in trader sentiment and an increase in long liquidations.
Bitcoin price is falling from two key positions
Over the past two days, Bitcoin price has fallen below two key thresholds. On December 17, the daily time chart showed a decline below the $42,000 level.
At the time of writing, the chart also showed a slight decline below the $41,000 level. This downtrend has characterized the price movement since it surpassed $40,000.
Source: TradingView
Additionally, as of this writing, the Moving Average Convergence Divergence (MACD) trend has turned negative, indicating a bearish trend.
This observation is consistent with confirmation from the Relative Strength Index (RSI) line, which was around 50. The position of the RSI suggested a weak uptrend and a possible change to a downtrend soon.
Bitcoin long traders continue to face setbacks
Although sentiment remained positive despite the recent price drop, it was bearish. AMBCrypto noted that according to data from Coinglass, Bitcoin's funding rate fell after the price drop.
At the time of this writing, the funding rate was around 0.010%, compared to 0.014 on December 17th. This funding rate suggested that fewer traders were optimistic about a price increase.
Additionally, more long positions were liquidated than short positions due to the price drop.
According to Coinglass, on December 17, over $30 million worth of long positions were liquidated, while $5 million worth of short positions were liquidated.
This trend continued at press time, with the latest data showing continued liquidation of long positions at over $29 million and approximately $3 million in short positions.
Read Bitcoins [BTC] Price prediction 2023-24
Bitcoin inflows dominate foreign exchange flows
The Bitcoin exchange flowchart shows increased BTC movements on exchanges recently. The move hinted at a possible sell-off, which could explain the observed price fluctuations.
At the time of this writing, there were signs of a temporary cessation of this inflow and a significant increase in outflow. Additionally, over 2,000 BTC were withdrawn from exchanges.
Source: CryptoQuant
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