Bitcoin’s Bounce Trigger Is Revealed

Bitcoin was able to make a spectacular price bounce, and more investors are wondering what the specific trigger is. Check out the latest reports which are trying to shed some light on this issue.

An important crypto analyst is currently searching for clues as to why Bitcoin (BTC) suddenly broke to the upside after weeks of price action that had been sideways at best.

In a new strategy session, the host of financial education YouTube channel InvestAnswers addresses some potential scenarios which range from the geopolitical to the technical.

“Risk-on is back. Certain names that are really beaten down are back.”

He also said this:

“Not only the lack of trust around the world in fiat regimes but also risk-on. But this is what I believe is the real reason – the perpetual funding rate.”

As the online publication the Daily Hodl notes, there is one tool available to crypto investors is the ability to take leveraged positions in futures contracts that never expire. In order for the markets to maintain funding, periodic payments are required.

The analyst also made sure to explain just how funding rates impacted BTC’s recent rally:

“There was a massive negative funding rate. This can lead to a short squeeze. When the rate is positive, long positions pay short positions. Conversely, when the rate is negative, short positions pay long positions.”

He also said that when this is very negative, we have something concerning involved.

He said this:

“It tells me that all the shorts are going in hard and they’re investing in a lot of puts. But I think the short side got squeezed hard in a massive short squeeze.”

At the moment of writing this article, BTC is trading in the red and the king coin is priced at $43,308. Stay tuned for more news.