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Bitcoin Funding Rates Briefly Went Negative, Usually Marks a Local Bottom: Van Straten

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Bitcoin (BTC) has not broken below $90,000 since Nov. 18, and continues to swing between $90,000 and $100,000.

The sentiment generally flips bullish when bitcoin approaches $100,000 and investors try to continue the bull market. However, this also works the other way and as bitcoin heads toward $90,000, like on Thursday, investors turn bearish.

Bitcoin will move where maximum pain occurs, so far that is the chopping period between these two valuations.

Derivatives in bitcoin play a large part in these volatile price swings; derivatives such as futures and options only make up a few percentage points of the overall market capitalization but are becoming a greater influence in the market.

One metric that traders keenly observe is the futures perpetual funding rate. This is defined as the average funding rate (in %) set by exchanges for perpetual futures contracts. When the rate is positive, long positions periodically pay short positions. Conversely, when the rate is negative, short positions periodically pay long positions.

During a bull market, bitcoin tends to have a positive funding rate as traders believe the price will continue to rise, but when the market gets overheated, it tends to run out of steam, and the price starts to fall, which leads to liquidation cascades.

However, the same is true for the bear market as price floors become developed over the years, prices can rebound quickly, leading traders to scramble to cover. In these moments, local bottoms are formed.

As of Thursday, Glassnode data shows that the funding rate briefly went ( -0.001%), the first time this year and only a few times since November. This lead to a leverage flush and a sentiment re-shift before bitcoin moved back above $94,000. To compare how mild the negative funding rate was on Thursday, during covid-19 in March 2020, we saw negative funding rates peak at (-0.309%).

A negative funding rate doesn’t always lead to immediate price rebounds or bottoms, but can be watched alongside other price-chart tools and technical indicators to form a market view. Negative funding rates could also signal a continued bear market rather than an immediate bottom. Similarly, positive rates during a bull market might not mean the market is overheated, but could reflect continued strong demand.

Since 2023, the funding rate has mostly been positive due to bitcoin being in a bull market, yet it has come with brief periods of negative rates, which tend to occur during price bottoms. This was seen during the Silicon Valley Bank collapse in 2023, and 2024, just before bitcoin climbed higher in both years.

A floor tends to emerge when the funding rate goes negative and bears become overconfident. The same occurs when bulls become complacent, and the spot price can no longer keep up with the leverage being used. On both occasions, traders tend to get liquidated, and in this instance, it was the bears.

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Coinbase Outpaces S&P 500 With 43% June Rise as Stablecoin Narrative Grows: CNBC

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Shares of Nasdaq-listed cryptocurrency exchange Coinbase (COIN) rose 43% this month, making the firm the top performer in the S&P 500 since it joined the index at the end of last month.

June’s run is already the stock’s best since November and caps three straight monthly gains. Coinbase’s shares reached their highest level since their public debut.

COIN hit a $382 high this week before enduring a slight correction, ending the week at $353 and seeing a slight 0.7% drop in after-hours trading to $351.

The wider S&P 500 index rose roughly 5% in June as geopolitical tensions eased.

Washington’s progress on the GENIUS Act, Congress’s first rulebook for dollar-pegged stablecoins, helped shift investor focus from trading fees to stablecoin revenue.

The bill brightened the outlook for Circle, whose shares hit a record high and saw its market cap near that of Coinbase this week.

Coinbase keeps all yield on USDC balances held on its platform and nearly half of other USDC income, equal to about 99 percent of Circle’s revenue, giving shareholders indirect exposure at no added cost, CNBC reported Friday, citing analysts including Citizens’ head of financial technology research Devin Ryan.

Trading, however, remains subdued. Average daily volume on Coinbase has drifted lower since April.

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Robinhood Launches Micro Bitcoin, Solana and XRP Futures Contracts

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Robinhood (HOOD) has introduced micro futures on bitcoin (BTC), solana (SOL) and XRP in the United States., expanding its existing crypto futures offering for its nearly 26 million funded accounts.

Micro contracts need far less collateral than full-size futures, letting traders take directional positions while committing a smaller slice of capital.

The contracts offer traders more flexibility to bet on a cryptocurrency’s future price direction or hedge current positions given their smaller size.

The launch rounds out a futures suite that began with BTC and ETH in January. It also comes weeks after the firm closed its $200 million purchase of Bitstamp and finalized a $179 million deal for Canada’s WonderFi.

Robinhood’s data shows that crypto notional volumes have exploded upward over time, reaching $11.7 billion in May. The figure marks a 36% rise month-over-month, and a 65% growth year-over-year.

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Why is XRP Up Today? Trio of Catalysts Sees Token Outperform Wider Crypto Market

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XRP climbed 5.5% to $2.19 in the last 24 hours after a trio of catalysts converged to help the cryptocurrency outperform the wider cryptocurrency market.

One of the catalysts was launch of XRP micro futures on Robinhood. The contracts offer traders more flexibility to bet on the cryptocurrency’s future price direction or hedge current positions given their smaller size.

Regulatory fog also thinned. On Friday, Ripple withdrew its cross-appeal in its long-running U.S. Securities and Exchange Commission (SEC) lawsuit. The SEC sued Ripple back in 2020 over its XRP sales, alleging these violated securities laws. The SEC is expected to drop its own appeal, leaving last year’s ruling, ordering Ripple to pay a $125 million civil penalty to the SEC, intact. The move could lift a lid that had kept some investors on the sidelines.

On-chain data rounded out the bullish setup. The XRP Ledger logged over a 1.1 million active addresses over the past week according to crypto analyst Ali Martinez, who cited Glassnode data.

XRP’s rise saw it outperform the wider crypto market, with the broader CoinDesk 20 (CD20) index rising 1.7% in the last 24 hours.

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