MAC_D
Reducing BTC Funding Ratio, Waiting for Market Capitulation
BTC funding rate rose to 0.049% on January 2, indicating that long futures positions were overheating, but this drop has brought the funding rate down to 0.01%, indicating that it is cooling off. The fact that the funding ratio has been positive recently suggests that futures traders are still bullish on the market and are keeping their bets on the upside. Therefore, to end the BTC downtrend, we need to wait for a capitulation signal from market participants. This is because for a downtrend to end, a large number of leveraged long positions must be liquidated and there must be no more volume left to sell. If the price sharp drop and the funding ratio becomes negative on the 1-hour chart, it could mean that leveraged traders are overly pessimistic about the market, which could be a good opportunity to buy back BTC.