has surged back above the significant threshold of $70,000, setting its sights on retesting the record highs it achieved in March. This recent upswing above the said level appears positively distinct from the one seen three months ago. Let’s delve into the reasons why.A frothy market, often a precursor to a price correction, is characterized by a leveraged speculative frenzy. So far, perpetual futures tied to bitcoin and other cryptocurrencies show no such signs.
The lack of speculative froth means the latest breakout above $70,000 could be longer-lasting than in March. Funding rates in other large-cap cryptocurrencies tell the same story.The chart by Velo Data shows funding rates in large-cap coins, including BTC, currently hover in the green zone, representing the annualized 10% to 20% range. Funding rates over 100% represented the overheated category marked by red bars.
"Looking at the current market positioning, I don’t think things are anywhere frothy like they were in late March/early April," Greg Magadini, Director of Derivatives at Amberdata, said in a weekly newsletter. The bias for rate cuts starkly contradicts the situation in March when traders feared resurgent inflation would force the U.S. central bank to resume rate hikes.
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