The Bitcoin funding rate — a key measure of crypto market sentiment — has turned negative in the last few days, according to CryptoQuant. (Image Source: Unsplash)
Bitcoin climbed back above $90,000 on Tuesday, recovering from a bruising selloff that caught Wall Street off guard and erased nearly $1 billion in fresh leveraged bets. The rebound offered a brief respite in a months-long rout, but traders remain cautious, with sentiment still fragile and signs of stress persisting across crypto markets.
The original cryptocurrency rallied as much as 5.6% to $91,269, while its next biggest rival – Ether – rebounded by more than 8% to push its price back above $3,000. Smaller, less liquid tokens such as Cardano and Chainlink jumped more than 10%. Even so, several metrics point to a potentially uneven recovery, market watchers said.
The Bitcoin funding rate — a key measure of crypto market sentiment — has turned negative in the last few days, according to CryptoQuant, meaning there is more demand for bearish bets in the perpetual futures market than for bullish positions.
“Overall sentiment is cautious,” said Chris Kim, chief executive of quantitative asset management protocol Axis. “Crypto-native traders are nervous.” Institutional investors, meanwhile, appear to be waiting for the Federal Reserve’s interest rate decision next week before adding risk, he said.
Bitcoin has fallen almost 30% since hitting a record in early October, leaving the digital asset market on fragile footing after a weeks-long selloff. The downturn accelerated when roughly $19 billion in leveraged bets were wiped out.
Virtual currencies associated with US President Donald Trump’s family have been caught up in the selloff. Shares of American Bitcoin Corp., the crypto miner co-founded by Eric Trump, wiped out more than half of their value in less than 30 minutes on Tuesday, even as trading in the stock was halted multiple times due to intense volatility. The stock fell as much as 51%.
TRUMP, his official memecoin, collapsed from a record high of around $73.40 right after its launch in January. It’s now trading at around $6, according to CoinGecko. WLFI, the token of Trump-linked decentralized finance platform World Liberty Financial, is down roughly 30% from September’s high. MELANIA, the memecoin of First Lady Melania Trump, is trading at 13 cents, having lost nearly all its value since January’s peak.
