Bitcoin Funding Rate Drops 85% As Speculative Appetite Weakens – Details

Bitcoin has faced volatility and selling pressure since the start of February, dragging down altcoins and meme coins as bearish price action takes over the market. Bulls are showing signs of exhaustion, and analysts are calling for a broader correction, suggesting that BTC could see further declines before finding solid support.

With price action struggling to reclaim key levels, market sentiment remains uncertain. Key data from Glassnode reveals that the 7-day average funding rate has been in a steady decline since late January, now sitting at 0.004%—a staggering 85% drop from the December peak of 0.026%. This sharp decrease indicates that demand for leveraged long positions is fading, a sign that speculative appetite in the market is weakening.

Without renewed leverage and buying pressure, Bitcoin’s price action may remain choppy or corrective in the near term. While long-term fundamentals remain bullish, the short-term outlook suggests that BTC could see additional downside before a meaningful recovery takes place.

Investors are now watching for key support levels that could stabilize the market and provide an opportunity for the next leg higher. Until then, uncertainty and caution dominate the crypto landscape as Bitcoin navigates this consolidation phase.

Bitcoin Demand For Leveraged Longs Fading

Bitcoin’s price is currently hovering around the $96K mark, with bulls struggling to reclaim the $100K level and establish it as solid support. The market remains under pressure, with bears keeping BTC below critical supply zones, leaving analysts concerned about further declines in the short term.

Key metrics from Glassnode shared on X provide insights into this bearish sentiment. The 7-day average funding rate has steadily declined since late January, now sitting at 0.004%—a significant 85% drop from its December peak of 0.026%. 

This sharp decrease in funding rates signals that demand for leveraged long positions is fading, and speculative appetite in the market is weakening. Without renewed leverage from traders, Bitcoin’s price action is likely to remain choppy or even turn more corrective in the coming weeks.

This weakening sentiment aligns with the struggles Bitcoin faces at critical levels. Bulls must reclaim and hold the $100K mark to change the narrative and regain control. However, repeated failures to breach key supply zones have emboldened bears, leaving the market in a state of uncertainty.

If Bitcoin fails to hold above current levels, a drop into the $90K demand zone could be on the horizon. Conversely, a successful push above $100K could spark renewed optimism and pave the way for BTC to challenge all-time highs once again. Until then, the market’s trajectory remains uncertain, driven by fading speculative interest and cautious investor sentiment.

BTC Price Struggles Below $100K

Bitcoin is trading at $96,500 after closing at this same price for three consecutive days, highlighting the indecision in the market. Bulls have struggled to push the price above the critical $100K mark, a level that signals strength and could reignite bullish momentum. On the other hand, bears have also failed to take control, with BTC holding steady above the $96K support level. This tug-of-war leaves Bitcoin at a pivotal point where the next move could define the short-term trend.

If BTC manages to stay above the $96K level in the coming days, the next step for bulls is to reclaim the $100K mark and hold it as support. Achieving this would not only signal a recovery but also set the stage for another attempt at all-time highs. However, continued failure to break above $100K could lead to a loss of momentum and increased selling pressure.

In such a scenario, a drop into the $90K demand zone becomes a likely outcome. The $96K level is now acting as a key battleground for bulls and bears alike, with its outcome set to dictate Bitcoin’s trajectory in the short term. Until then, indecision dominates the market, keeping investors on edge.

Featured image from Dall-E, chart from TradingView