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06 March 2021

A Bitcoin price dip for ants? BTC quickly rebounds to a new high above $57K

A Bitcoin price dip for ants? BTC quickly rebounds to a new high above $57K


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A drop was expected because Bitcoin was consolidating with the futures funding rate at around 0.15%.

Across major futures exchanges, the Bitcoin futures funding rate was hovering between 0.1% to 0.2%, and it was particularly high for stablecoin pairs.

Bitcoin futures exchanges use a mechanism called funding to incentivize buyers or sellers based on market sentiment.

When the funding rate is high but the price of Bitcoin is consolidating, the risk of a big short-term drop increases.

However, it remains uncertain whether Bitcoin would react the same way given that it is not only considered a risk-on asset but also as an inflation hedge, which means it could counter the risk of the Treasury curve.

Thus, there is a possibility that the inflation hedge aspect of Bitcoin counters the rising Treasury curve

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cointelegraph.com
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