Significant Lack of Demand In the Market

Significant-Lack-of-Demand-In-the-Market

The perpetual futures market significantly affects the short-term price movement of Bitcoin. As a result, it could be beneficial to assess the sentiment of the futures market, and one of the best metrics to do so is funding rates.
The funding rates have turned negative once again as the price has dropped from the $22K level and is consolidating at the $19K support. However, the metric’s values are significantly low compared to the 2019-2021 period indicating a massive lack of demand and activity in the futures market, which usually results in a period of consolidation and range phase. This metric should be watched closely in the short term as possible extreme negative values increase the probability of a short-squeeze and could cause a reversal in the cryptocurrency’s price.