It’s beginning to seem that bitcoin traders are a little too bullish for their own taste.
The leading cryptocurrency has exploded higher in the past two days, rallying from the weekly lows of $13,300 to highs near $16,000. According to Newsbtc.com, this rally arrives as the U.S. dollar has come down on expectations that Joe Biden will win over the White House in the presidential election.
Bitcoin may go higher as the U.S. dollar goes lower, but potential price evidence suggests that the rally is rapidly becoming unsustainable. Namely, the funding rates of futures markets have gradually started to tick higher since the spot-market rally. Bitcoin’s $16,000 rally was predicated on a surge of spot market volumes as buyers, both individual and institutional investors, purchased Bitcoin en-masse for safekeeping. But the data reveals that this is beginning to shift as the demand outstrips.
One crypto-asset analyst posted and noted that the Bitcoin futures market is heating up: “Retail is starting to believe again. For the first time since August we have what is considered bearish funding. Binance L/S ratio is going up rapidly.”