Market influencers react to Bitcoin price drop with widely divergent opinions
Despite the short beak that Bitcoin has recently suffered, different market influencers have responded quite differently to the price drop.
Bitcoin has been struggling in the last couple of weeks, and funding rates have responded differently to the price. Instead of rising when the price had begun to plummet, they were muted and even began to decline, especially during the past week. However, this is changing as the value of the digital asset has begun to see an improvement.
After experiencing a period of decline, the funding rates have risen.
Last month, Bitcoin funding rates hit one of their lowest points and the price of the digital asset was high. At that point, long traders were content to stay out of the market while it crashed. This has changed since long traders have begun to enter the market.
Bitcoin perpetuals on the Binance and Bybit crypto exchanges have shown a good recovery trend over the last week. Although it remains below neutral, it is close to regaining that level. Bybit had its bitcoin perpetuals recover to 0.01% over the weekend. Binance still remains in the negative territory but an average of both has returned an average of 0.003% in the perps market.
Traders who hold positions for a long time have been awakened from their slumber. This time, they are doing it with great strength, as shown by the sharp increase in growth over this period.
It is not known whether the current recovery in bitcoin's price will continue into the following week or if it will prove to be a one-time event. If it turns out to be the former, then this may not have been a short-term recovery after all.
Bitcoin is on the rise again
The digital asset market has been having better luck holding on to its $20,000 support level compared to a couple of weeks back. Bitcoin's performance in July hasn't been as good as investors were hoping, but it has held on to its June low of $7,300.
This week, the digital asset has recovered a good chunk and has been close to testing the $21,000 resistance level once again. It is still under key technical levels but the return in positive sentiment suggests that there could be more recovery to come.
If long traders become active and the funding rate of bitcoin recovers, it's possible that bitcoin could test the $22,500. That is an unlikely price level as of now but feasible if the bearish sentiment remains in the market.
At the time of writing, Bitcoin is worth $20,860. It remains the largest cryptocurrency with a market cap of $398 billion.
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