Bitcoin funding rate signals no signs of ‘late-cycle overheating’ — Analyst

The Bitcoin funding rate signals that the market is not overly frothy and shows no signs of Bitcoin’s price peaking too early in the cycle, according to a crypto analyst.

“Analyzing the funding rate using a 30-day exponential moving average (EMA), there are no visible signs of late-cycle overheating,” CryptoQuant contributor Avocado onchain said in a Dec. 17 markets report.

Bitcoin’s upward trend ‘likely to continue,’ says analyst

“This indicates that Bitcoin’s upward trajectory is likely to continue, with significant room for further growth,” they added.

Pseudonymous crypto trader Rekt Capital said in a Dec. 17 X post, “Bitcoin has only just begun its parabolic phase in the cycle.”

Rekt claimed that this phase typically lasts 300 days, but it’s only on “day 41” so far.

CoinGlass data shows Bitcoin’s (BTC) funding rate, the payments that help keep trading fair by aligning futures and spot market prices, is at 0.0084% on Binance — the largest crypto exchange by trading volume.

In a buyer-dominated market, buyers may need to pay sellers a fee (positive funding rate) to maintain their positions. On the other hand, in a seller-dominated market, sellers pay buyers (negative funding rate).

In August, when Bitcoin dropped below $60,000, its funding rate on Binance sank to the lowest levels of the year, indicating a significant shift in market sentiment.

‘Not overheated at all,’ says trader

Pseudonymous crypto trader Mister Crypto said in a Dec. 17 X post, that the Bitcoin funding rates “are still not overheated at all.”

“We will push higher as long as they will not reach 1%,” they added. It comes after Bitcoin tapped a new all-time high of $108,239 on Dec. 17, according to CoinMarketCap data.

Avocado said that the future and spot Bitcoin markets “experienced a prolonged period of reduced trading activity” between March and October when Bitcoin’s price was consolidating within a wide range from $53,000 to $72,000.

“However, since October, trading volumes in both markets have risen simultaneously, driving Bitcoin’s upward price momentum,” Avocado said.

Related: Bitcoin ETFs flip gold funds in AUM: K33 Research

Meanwhile, Bitfinex analysts recently said that Bitcoin price dips will be short-lived in 2025 due to strong institutional demand.

“Our view is that any corrections in 2025 will remain mild, thanks to institutional inflows,” the analysts said. 

Bitfinex analysts conservatively projected that by mid-2025, Bitcoin could reach $145,000 and, under “favorable” conditions, potentially rise to $200,000.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.