The fact that the leading cryptocurrency Bitcoin again pushed the $22,000 levels brought to mind the questions of whether the crypto money market is turning green. According to some analysts, these rises are just a relief rally, while others think that Bitcoin is at the bottom. It is also stated that many indicators in Bitcoin give the bottom signal.
Popular analyst Will Clemente talked about indicators that can be followed for a reversal signal in Bitcoin. According to Clemente, these three conditions will need to be met for the turn signal to arrive. The analyst also explained the latest situation in these indicators to his followers with a graphic.
The analyst thinks that there should be an increase in the number of open positions first. Open Interest data that can be tracked is used to measure investors' interest in futures markets. A rise in Open Interest indicates that there is a demand for risk in the market and traders want to support their positions with leverage. These leveraged transactions are thought to strengthen the trend.
The "Negative Funding Ratio" indicator can also be very decisive in the direction of the market. Depending on the density of short or long positions in leveraged transactions, one party pays the other a fee, we call it the funding rate. According to Clemente, the ideal scenario in the funding rate is the scenario where the funding rate increases in negative territory as the price rises. This may indicate that both small investors concentrate on short positions and large investors hedge their spot purchases with leveraged reverse trading. Negative funding is a positive data for the rise.
Futures-Spot Price Spread: It is rare for the spot market price to exceed the futures price and is an indication of high demand. According to the analyst, this has happened in some exchanges such as FTX.