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The price of Bitcoin has achieved a certain recovery up to now few weeks and raised questions on the sustainability of this fresh bullish dynamic. It stays to be seen whether the flagship cryptocurrency places the trap of a bull or raises a legitimate claim to a brand new all-time price. However, the most recent on-chain data indicate that the Bitcoin price could also be firstly of a robust upward trend.
Is there a correlation between BTC price and Binance financing rates?
In a Quicktake post on the Cryptoquant platform, the on-chain analyst Burak Kesmeci examined how the financing rates for Binance will be used with a purpose to analyze Bitcoin's price. For the context, the “Finance Rate” metric measures the periodic fee between dealers available on the market for derivatives (perpetual futures).
A positive financing rate shows that the long dealers (investors with purchase positions) pay short dealers (investors with sales positions). This trend of the periodic fee signals the prevalence of a bullish feeling on the cryptoma market.
On the opposite hand, a low financing metric implies that investors with short positions pay long retailers on the derivative market. This direction of the financing rate suggests that the market is dominated by the empty sellers.
According to Kesmeci, an in depth assessment of Binance's Bitcoin financing rates up to now 30 days shows a transparent correlation with the short-term price movement. When the financing rates became positive, the value for BTC recorded remarkable increases at short notice.
Source: Cryptoquant
The on-chain analyst emphasized two scenarios last month, by which the BTC price had a robust correlation with the financing rates. First, the Bitcoin financing rates in Binance reached a robust area between 10 and 22 April and reached a robust level (0.0030 and more). The price rose from 79,000 to $ 93,000.
In the second period – between May 6 and 10, the financing rates were once more closed to a positive area, with the Bitcoin price jumping between 95,000 and 103,000 USD during this time. According to Kesmeci, the financing rates of Binance – the world's largest stock exchange through trading volume – remain decisive for the BTC Prize Track.
Kesmeci got here to the conclusion that the rise within the spot market, which was reinforced by positive financing rates on the futures market, interprets a robust short-term upward trend for the Bitcoin price. With further bullish dynamics, it could only be a matter of time before the Premier cryptocurrency retains its current price of all time and possibly has a brand new one.
Bitcoin price at a look
At the moment, the value for BTC is around 103,605 US dollars, which reflects a jump of 0.5% within the last 24 hours.
The price of BTC within the day by day timeframe | Source: Btcusdt diagram on tradingview
Selected picture of iStock, Diagram by Tradingview
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