Approximately three weeks ago, bitcoin reached a record high of $73,500 before rapidly falling to the $61,000 region.Bulls have some hope that new records are on the horizon as it has since retraced to the current $67,600.However, the price correction appears to have more space to run, according to at least one sentiment indicator. According to CryptoQuant, the so-called futures funding rate—which is the amount paid to traders based on the discrepancy between perpetual contract markets and spot prices—is currently at an all-time high.“Funding rates represent traders’ sentiments in the perpetual swaps market and the amount is proportional to the number of contracts,” the group stated.Positive financing rates show that long-position traders are in control and are prepared to provide funds to short-position traders.
According to CryptoQuant, positive funding rates indicate that long traders, or those who are betting on higher prices, are in control of the market and are prepared to provide money to short sellers, or those who are betting on lower prices.This high of financing rates was last seen in April 2021.After that, in just three months, Bitcoin fell from above $60,000 to under $30,000.
Curiously, the U.S. Commodities Futures Trading Commission (CFTC) recently released data that indicates record short holdings in futures held by hedge funds and commodities trading advisers (CTAs), coinciding with the CryptoQuant study.