Bitcoin funding rates show demand to short BTC as $40K becomes resistance

Bitcoin (BTC) consolidated nether $40,000 connected April 23 arsenic marketplace expectations favored further losses.

BTC/USD 1-hour candle illustration (Bitstamp). Source: TradingView

"Extreme fear" accompanies Bitcoin's descent to $39,200

Data from Cointelegraph Markets Pro and TradingView followed a bearish BTC/USD aft the brace touched $39,200 connected Friday's Wall Street open.

Falling successful enactment with stocks, Bitcoin present faced the imaginable of absorption cementing itself astatine the $40,000 mark, with traders showing their deficiency of assurance successful a short-term rebound.

Data from on-chain analytics tract Coinglass confirmed that backing rates crossed derivatives exchanges were firmly antagonistic into the weekend, suggesting that the bulk of marketplace participants expected shorting to beryllium a profitable adjacent trade.

BTC backing rates chart. Source: Coinglass

For expert Filbfilb, co-founder of trading suite Decentrader, the ratio of agelong to abbreviated positions was a furthe origin for concern.

— filbfilb (@filbfilb) April 22, 2022

"Bitcoin back connected this important level here. Losing this -> $36K seems next," Cointelegraph contributor Michaël van de Poppe added successful a caller Twitter update connected the day.

BTC/USD circled $39,800 astatine the clip of writing, having avoided a travel to take bargain liquidity beneath $38,000 truthful far.

Cold feet among traders was meantime echoed successful sentiment gauges, with the Crypto Fear & Greed Index heading backmost into the "extreme fear" portion connected Saturday.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

DXY absorption sought for BTC inclination break

Despite the deficiency of confidence, not everyone was funny successful abandoning their religion successful Bitcoin beyond the abbreviated term.

Related: Nasdaq has dotcom clang 'deja vu' says trader arsenic Bitcoin correlation rises

"Prepare yourself for the adjacent runup. Historically speaking, this has been 1 of the champion ranges for buying Bitcoin!" fashionable YouTuber Crypto Rover argued alongside a illustration comparing Bitcoin terms show to the spot of the U.S. dollar. 

U.S. dollar currency scale (DXY) vs. BTC/USD annotated chart. Source: Crypto Rover/ Twitter

As Cointelegraph reported, the U.S. dollar currency scale (DXY) is presently adjacent two-year highs, and a reversal has historically fixed Bitcoin the substance to ace semipermanent downtrends.

U.S. dollar currency scale (DXY) 1-week candle chart. Source: TradingView

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.