Crypto News

Bitcoin Funding Rate Rises Amidst On-Chain Activity Slump

Bitcoin’s recent surge in funding rate on exchanges like DyDx and Deribit is causing concern among crypto enthusiasts, who are wary of history repeating itself after last week’s market top.

With bullish sentiments prevailing, there’s a desire to keep Bitcoin FOMO (Fear of Missing Out) in check, ensuring that shorts open at a rate equal to or higher than longs.

Interestingly, on-chain activity for Bitcoin has reportedly plummeted to a five-year low, marking its lowest level since 2019. This decline in on-chain activity raises questions about the current state of the market and investor sentiment towards the flagship cryptocurrency.

However, amidst the overall market downturn, there are signs of bullish activity from institutional investors. According to on-chain reports from Lookonchain, two whales seized the opportunity to buy 791 BTC, worth approximately $49.8 million, at the recent market bottom. This strategic accumulation suggests confidence in Bitcoin’s long-term prospects despite short-term fluctuations.

Whales Keep Accumulating Bitcoin While Bitcoin ETF Net Inflow Turns Positive 

One whale, identified as 1LXdAT, has been steadily accumulating Bitcoin since March 19, amassing a total of 4,736 BTC, valued at around $309 million, at an average price of $65,264. Another whale, bc1qr4, has been similarly accumulating Bitcoin since November 19, 2023, acquiring 791 BTC, worth approximately $35.7 million, at an average price of $45,156.

In addition to whale activity, Bitcoin ETF net inflow for May 13, 2024, totaled a positive $66 million after two consecutive days of negative inflows. Although no ETFs experienced outflows, seven out of ten US Bitcoin ETFs, including industry giants like Grayscale and BlackRock, reported zero flows. Over the last 30 trading days, Bitcoin ETFs have recorded a net outflow of $297 million, with outflows occurring on 17 of those days.

These developments underscore the dynamic nature of the cryptocurrency market and the importance of monitoring both on-chain and institutional activity to gauge market sentiment and potential investment opportunities.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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