Bitcoin’s 20% rebound in one day is one of its biggest ever — But there’s a catch

Bitcoin’s 20% rebound in one day is one of its biggest ever — But there’s a catch


The price of Bitcoin (BTC) rose 20% on Jan. 12 from $30,500 to around $36,600 across major exchanges. But while the rebound after the correction has been strong, there are two warning signs.

BTC/USDT 1-hour price chart (Binance). Source: TradingView.com

First, the funding rate in the futures market remains high. The funding rate is a mechanism that incentivizes the minority of the market.

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For example, if there are fewer short-sellers in the market, then buyers have to pay short-sellers a fee every eight hours. If the funding rate is high, it means buyers are paying sellers.

Second, the U.S. dollar strength index (DXY) is beginning to recover, which could be a bearish sign for Bitcoin and gold.

What comes next after the drop and the recovery of Bitcoin?

According to Julien Bittel, a multi-asset fund manager at Pictet Asset Management, the U.S. dollar is “very oversold.”

The dollar has continuously declined since the pandemic began in early 2020, struggling to

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