Bitcoin futures and derivatives data reveals that the funding rate for the leading cryptocurrency turned negative for the first time this year, just before the halving event. Market data provider Kaiko highlighted this occurrence while discussing Bitcoin’s network condition before and after the recent halving, which took place on April 20. The halving reduced Bitcoin’s block reward from 6.25 to 3.125 BTC, thereby decreasing its inflation rate.
Kaiko’s recent report confirms that the halving is already having significant effects on Bitcoin. One of these impacts occurred before the halving, as the BTC funding rate flipped negative for the first time this year.
Data from Coinalyze, a crypto derivatives and futures market platform, supports Kaiko’s findings. Notably, Bitcoin’s aggregated funding rate across all major derivatives markets dropped to -0.0030 on April 18, marking the first negative figure of the year.
The last time the BTC funding rate fell into negative territory was on October 19, 2023, when it reached -0.0047. Since then, the metric had remained positive, reaching a peak of 0.0669 on March 31 of this year. However, it continued to decline from this high, ultimately turning negative on April 18.
The metric also showed a negative value on April 19, the day before the Bitcoin halving, registering -0.0006. A negative funding rate indicates that short positions are paying long positions, suggesting increased bearish sentiment as short positions compensate long positions for their exposure.
After two consecutive days of negative values, Bitcoin’s funding rate has recovered shortly after the halving, with the latest value being 0.0051. Aggregated Open Interest (OI) has also rebounded since dropping to $15.55 billion on April 17, now standing at $17.18 billion.
Currently, the BTC Long/Short Ratio has increased to 1.46 over the past 24 hours, indicating that market participants are more bullish than bearish. Kaiko further confirmed in its report that the latest Bitcoin halving has had a more positive impact on Bitcoin’s price compared to the previous three halvings.
According to Kaiko, at the time of its report, BTC had risen by 3% since the halving, which is a more significant increase than what was observed after the halving events in 2012, 2016, and 2020. Despite a subsequent 2% drop in the last 24 hours, BTC is still up 2.1% since the halving.
Currently trading at $65,218, Bitcoin has seen an 8.65% decline this month. If it closes April with a decline, it would be the first red monthly candlestick for Bitcoin this year. Despite the short-term downward pressure, investors remain optimistic. Trader Oasis, an author at CryptoQuant, emphasized that the declining funding rate is positive for BTC, pointing to the current bullish Coinbase Premium Index.
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