Bitcoin's price action hasn't had much stability over the past few weeks. The constant price volatility has frustrated the market to the point where a portion of investors actually want the price to fall further.

Short-term prices at home

Data on the chain suggests that the number of investors looking to short Kingcoin has increased significantly in the past few days. This indicates a huge demand for short interest in bitcoin.

In the last week alone, this short interest has increased by 329.66%. And, the same consequences are evident in the performance of the King Coin.


Bitcoin Price Trend | Source: TradingView – AMBCrypto

The average financing rate has turned negative due to the recent shorting. The indicator in the chart below is revisiting negative territory, which is a good sign. It is worth noting that financing rates were even worse around the first week of March.


Bitcoin Funding Rates | Source: Santiment

It is worth noting that futures contracts with cryptocurrencies as margin have been trending lower until the first week of March.

Unlike stablecoin margin futures contracts, cryptocurrency margin contracts are vulnerable to price declines. In this case, they not only lose their profits, but also the value of the asset.

On the other hand, stablecoin margin contracts do not lose value. These are only preferred by long traders. Shorting them will lead to immediate liquidation because they cannot be hedged.

As a result, cryptocurrency margin contracts have fallen 27% in 10 months. However, their recent growth may indicate that investors are once again confident in bitcoin.

Otherwise, there is no reason why investors would dare to make such a stunt in a bear market. (K-line chart on the rise)

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Bitcoin Cryptocurrency Margin Futures OI | Source: Glassnode – AMBCrypto

Second, supporting this confidence are the negative funding rates mentioned earlier. Falling funding rates actually bode well for investors, as they indicate a buy signal.

In the past, prices have risen many times after financing rates bottomed, although these declines were more pronounced. In any case, if the historical test of the indicator goes as expected, one can expect prices to rise in the coming days. (Reference Bitcoin funding rates image)


Bitcoin Price Trend | Source: TradingView – AMBCrypto