As Bitcoin Breaks $57k, Quant Explains Why It Could See A Pullback Here

As Bitcoin rallies past $57k, Quant explains using on-chain analysis why the cryptocurrency may see a pullback here. Bitcoin Funding Rate And Futures Open Interest Show Rising Values As explained by an analyst in a CryptoQuant post, some BTC indicators are showing values that have historically signaled that a correction could be coming soon. The first metric of relevance is the Bitcoin funding rate, which is defined as the periodic payment that futures contract traders have to pay. Positive values imply most traders are bullish and long traders are paying this fee to short traders. While negative values mean just the opposite; traders are bearish on Bitcoin and short traders have to pay long traders. The other indicator is the futures open interest. This metric shows the total number of futures contracts that are open at the end of the trading day. Here is a chart showing the trend in both these indictors for Bitcoin: The funding rate and futures open interest vs the BTC price | Source: CryptoQuant As the above graph shows, both the indicators have been observing a rise in their values recently. The quant has marked instances where similar values were seen on the chart before. Looks like when such a trend in these metrics has been seen before, a correction has followed soon after. Related Reading | Bitcoin Eclipses Trillion-Dollar Market Cap on Equity ETF Approval – Crypto Weekly Roundup, October 11, 2021 Also,...