Bitcoin (BTC) has remained range-bound for the better part of the last week, hovering just below its latest all-time high (ATH) of $111,980 reached on May 21. Despite this milestone, speculative activity appears to be subdued, as funding rates on Binance – one of the largest crypto exchanges – continue to be in neutral territory.
According to a recent CryptoQuant Quicktake post by contributor Amr Taha, Bitcoin funding rates on Binance have stayed close to zero, even in the wake of a new ATH. This subdued level of funding suggests that excessive leverage among retail traders is currently absent – a positive sign for the sustainability of the ongoing rally.
For the uninitiated, funding rates are periodic payments exchanged between long and short traders in perpetual futures contracts to keep the contract price aligned with the spot price. When the rate is positive, long traders pay shorts, and when it’s negative, shorts pay longs – reflecting market sentiment and leverage.
In the current context, funding rates near zero indicate a balanced sentiment between bulls and bears, with neither side aggressively leveraging their positions. This neutrality points to a more stable market environment, reducing the risk of sudden liquidations and price crashes.
Adding, Taha brought attention to recent long-side liquidations that occurred when BTC slipped below two crucial price levels, $108,500, and $107,500. These events were captured in the below Bitcoin Buy/Sell Pressure Delta (90) chart, which further supports the narrative of cautious market participation.
In summary, if past patterns hold true, Bitcoin’s upside may be limited without significant inflows from new investors. For now, monitoring the growth in the share of new investors will be key to assessing future market direction.
