Bitcoin’s funding rate for long positions on the biggest margin trading platforms is skyrocketing. The crypto has repeatedly hit high since the beginning of the year. BTC has raised over $10,000 on Sunday, halting only after it met a significant amount of resistance.
Analysts are concerned with Bitcoin’s high funding rate will cause severe problems in the cryptocurrency market soon. They think that this is a bearish sign, predicting the downfall. The crypto analyst, and trader, Jacob Canfield, tweeted that while Bitcoin’s price is falling, the long-position funding rate’s increase is bad for the market.
The crypto formed a bullish market structure over the last couple of months, but experts fear that Bitcoin’s recent price action has done tremendous damage. According to them, Bitcoin might collapse in the coming months, facing severe losses.
How will Bitcoin’s fall influence the crypto market?
Analysts stated that if Bitcoin drops, it may cause high turbulence on the crypto market, with the major altcoins also tumbling down after their recent rallies.
The smaller cryptos often outperformed Bitcoin since the beginning of 2020. Such occurrence is quite common within bullish market conditions. But experts noted that when Bitcoin falls, altcoins often lower too. They think that this could be the case soon in the crypto market.
Some cryptocurrencies, which outperformed during 2020, has already declined. Tezos and Chainlink lowered by 10% and 8%, respectively, due to Wednesday’s sell-off. Ethereum, XRP, Bitcoin Cash, and Litecoin, have suffered losses too. For now, they are trading down just under 5%.
On the other hand, Bitcoin is trading down by 2.5% so far. While it isn’t a bad result, crypto may decline more in the coming days. But if Bitcoin falls beyond its key support at $9,000, the other altcoins may soon see sizeable losses too. However, so far, the crypto is staying relatively steady.