Bitcoin Bears Control Binance as Positive Funding Rate Persists

Bitcoin remains stable currently but faces significant selling pressure following the liquidation on August 27, indicating some technical weakness. The outlook, however, could change if BTC bulls manage to surpass the immediate resistance level at $66,000, which corresponds to the highs of August 23. A subsequent upward move would confirm the uptrend from August 8.

Prior to this, traders were cautiously optimistic, recognizing Bitcoin’s fragile nature and historical price volatility. Notably, traders on Binance, the largest exchange by client count, are predominantly bearish, as observed by an analyst. This shift in sentiment towards bearishness, with more traders refraining from placing short positions, could lead to a further decline in the coin’s value, confirming losses from August 24.

The prevailing sentiment among traders is one of neutrality, as indicated by the CMC Crypto Fear and Greed Index, suggesting a wait-and-see approach. This sentiment has persisted since early August when a sharp price drop led to a surge in fear among traders, reminiscent of early September 2023. The sentiment chart reveals that extreme greed among traders occurred only when Bitcoin surged to its all-time high of $73,800 over the past year.

Given the current scenario of weak prices and neutral sentiment, there is a possibility of a short-term boost for optimistic bulls if Bitcoin manages to recover above $63,000, potentially reversing the losses from August 27 and sparking renewed demand. This recovery could serve as a foundation for further price gains beyond the highs of August 2024.

Despite the optimism, it is worth noting that the average funding rate across major platforms like Binance, Bybit, and OKX remains positive at 0.002%. This implies that traders holding short positions are receiving payments, indicating that perpetual contracts are trading at a premium compared to spot prices. Such a scenario could attract more sellers and contribute to the ongoing downtrend.

Funding rates typically turn positive during price rallies, signaling bullish sentiment, and shift to negative when prices decline, requiring short sellers to pay those betting on price increases. This dynamic suggests a complex interplay between market sentiment and price movements in the cryptocurrency space.