K33 Research Predicts Bitcoin Funding Rates Could Soon Reach Historic Lows

The past few weeks have been turbulent for the world’s most popular cryptocurrency, Bitcoin, due to a combination of factors. Prevailing economic conditions are affecting the performance of major cryptocurrencies, and the market is currently reflecting these challenges. As bearish sentiment continues across both traditional and blockchain markets, K33 Research suggests that Bitcoin funding rates may soon reach historic lows.

Several key factors have informed this analysis. One major reason is the potential impact of the U.S. Federal Reserve’s anticipated interest rate cut. A reduction in interest rates lowers the profitability of trading the U.S. dollar against other major currencies, which in turn affects broader investment strategies. Additionally, the current U.S. employment ratio indicates an economy in need of support. In response, investors are adopting positions that mitigate potential risks. Bitcoin (BTC) is not the only asset affected by bearish sentiment—stock market indices such as the S&P 500 and Nasdaq are also predicted to see declining investor confidence, according to K33 analysts David Zimmerman and Velte Lunde.

As the effects of the latest Consumer Price Index (CPI) announcement take hold, the crypto market is expected to display even more risk-averse behavior.

September has recorded a notably low average for daily funding rates in the perpetual swap market. The last time funding levels were this low was in March. However, price action is expected to recover in the coming months, based on an analysis of historical trends. This is only the seventh instance of negative funding rates in a 30-day period since 2018. K33 analysts predict that these negative funding rates could lead to short squeezes and a rise in open interest, potentially pushing the market to new heights.

Currently, Bitcoin is trading above $63,000, reflecting a 5.5% increase over the past seven days.