Bitcoin indicators suggest a potential bullish trend

According to market analysis, bitcoin traders are eyeing two key indicators, the funding and three-month annualised basis rates, indicating a potential upward price movement.

A crypto expert, Will Clemente, noted in a recent post on X, “Looks like we’re consolidating before the next leg up,” highlighting that both indicators have “cooled off” after briefly dipping into negative territory.

The funding rate, a significant indicator of overall trader sentiment, recently recovered from negative territory. This recovery suggests an increasing confidence among traders in Bitcoin’s price. Exchanges use the funding rate to balance traders entering long positions with those opting for short positions, mitigating the risk of overexposure.

According to open-source data, the open interest-weighted funding rate is 0.0091%, indicating a positive shift from a negative rate of -0.0050% on May 4.

“The Bitcoin funding rates remaining this low, while Bitcoin is bouncing makes me feel extremely bullish,” echoed pseudonymous crypto trader Mister Crypto to their 98,000 X followers.

However, liquidation data contradicts this bullish sentiment, suggesting that futures traders are still leaning bearish and anticipate a near-term price drop.

A 3.5% rise in price to the key $65,000 level could liquidate $1.36 billion in short positions, whereas a 3.5% drop to $60,500 would only wipe out $650 million in long positions.

In addition to the funding rate, traders are also monitoring the three-month annualised basis rate, which measures the cost difference between Bitcoin futures contracts and the actual price of Bitcoin.

Major exchanges have seen an increase in the annualised basis rate, reaching the higher end of the 5–10% neutral range. Traders often view rates above 10% as a neutral-to-bullish signal.

With both indicators showing signs of a potential bullish trend, traders are cautiously optimistic about Bitcoin’s price movement in the near term.