The crypto market has entered the year 2023 with a remarkable bullish run. In recent days, several assets have posted significant gains and are starting to get through the crypto winter.
In particular, Bitcoin, the market leader and the world’s largest digital asset, was one of the best performing coins this year. In the past seven days, BTC gained more than 17%, pushing the coin above $20,000 for the first time since the start of the FTX crisis.
Bitcoin’s impressive price rise has generated a lot of excitement among the crypto community along with a significant rise in positive sentiment around the entire crypto market. However, it seems that investors should be on their toes in the coming days.
Bitcoin records highest funding rates in over a year
According to a after by Maartun, a top analyst on the crypto analytics platform CryptoQuant, Bitcoin funding rates have reached their highest value in 14 months. The Crypto Quant contributor further stated that the occurrence of such high funding rates usually resulted in Bitcoin experiencing a price drop.
Funding rates are recurring payments to traders in a long or short position, depending on the difference between perpetual contract markets and spot prices.
Essentially, these payments serve as a method of keeping the price of perpetual contracts close to the spot price of an asset – Bitcoin in this case.
That said, when there are very positive funding rates on crypto exchanges, it indicates that traders are betting on the BTC/USD market to get higher prices and paying to go really long on BTC.
Trading positions like this can be quite risky as any small drop in price can lead to high levels of liquidation or force these traders to close their positions.
Therefore, these funding rates are definitely something all BTC investors should pay attention to in the coming days. For now, Bitcoin is holding up, with a gain of 1.83% in the past 24 hours, according to data by CoinMarketCap.
At the time of writing, the leading cryptocurrency is trading at $20,722.66, with a market cap of $399.23 billion.
BTC trades for $20,716 | Source: BTCUSD chart at Tradingview.com.
What to expect from Bitcoin in 2023?
According to popular price prediction site BitNation, Bitcoin could hit a peak price of $37,307.77 before the years run out. Their price forecast also states that BTC investors should expect an average price of $31,084.84.
However, the Tradingbeasts team is predicting a rather bearish Bitcoin market for 2023. According to them price forecasts, BTC is expected to post slight losses throughout the year, closing its annual market with a high price of $18,339 and an average price of $14,671.
So far, Bitcoin has shown a strong performance in 2023, gaining more than 25% since the start of the year. Undoubtedly, the leading cryptocurrency is an asset to look forward to in 2023.
Featured image: Forbes chart from Tradingview.com