Funding rates for futures bounced back as bitcoin dropped to $ 45,000

Open interest or the volume of active positions in bitcoin futures in 24 hours decreased by 15% to $ 12 billion, and in the market for most altcoins, the indicator decreased by 25-40%.

After a long period of significantly inflated values, indicating an overabundance of high-margin long positions, the futures funding rates returned to normal. On Binance, for bitcoin, the indicator dropped to neutral 0.01%, and for some altcoins it even went into the negative zone.

Traders tend to use large amounts of borrowed money to open long positions when they expect the rally to continue and thus hope to earn more. However, when the price drops enough, the collateral they provide is insufficient to secure the margin positions and they are liquidated by the exchanges. Over the past day, almost 650,000 traders have been liquidated, and the largest of them occurred on the bitcoin market of the Huobi exchange – its volume amounted to $ 20.66 million.

Crypto market capitalization in two days dropped from $ 1.76 trillion to $ 1.38 trillion, bitcoin capitalization – to $ 900 billion, after it recently rose above $ 1 trillion for the first time. Trading volumes in 24 hours rose more than 60% to $ 264 billion.

“Only I feel relief when the stages of selling bitcoin come? – writes founder of Global Macro Investor Raul Pal. “You know they’ll come, and you can finally switch to buying at the lows. March has historically been a weak month. I don’t know if this will be part of a larger March correction or just another daring ouster of speculators. ”

Bitcoin experienced a 30% pullback last month and has lost about 23% of its value in recent days from its peak.

“It’s not very typical. On the 2017 trend, it grew for at least two months after each decline ”, – notes one of the traders.

“Approaching the rebound area. Resistance at $ 48,500 and $ 51,000, ”writes analyst Michael van de Poppe.

“As we noted yesterday, there was an eleven-fold increase in bitcoin inflows to exchanges, triggering a correction from an all-time high of $ 58,300,” analyst firm Santiment said. “The data shows that the address behind the second largest BTC transaction this year transferred 2,700 BTC to an exchange wallet ahead of the sale.”

According to Santiment’s observations, the same address was transferring cryptocurrency for an expected sale in March 2020 before the markets crashed.

“We are not claiming that one address is causing a pullback in the price of the world’s largest cryptocurrency asset. But has the activity of this address become an influencing factor? Yes, ”analysts explain.