Bitcoin is regular at press time but is under immense selling pressure after the liquidation of August 27. Technically, there’s a tinge of weakness.

Nevertheless, this preview will shift when BTC bulls push prices above the immediate resistance at $66,000. This response point marks August 23 highs, and a subsequent leg up will confirm the uptick of August 8.

Binance Traders Are Net Bearish

Before then, traders were cautiously optimistic, acknowledging Bitcoin’s fragile nature and historical volatility. Despite prices stabilizing at spot rates, one analyst on X notes that traders on Binance, the biggest exchange by client count, are primarily bearish.

Based on the analyst’s assessment, more traders aren’t placing shorts, a net bearish development for the world’s most useful coin. As more retailers place bearish bets, the coin could carve in, confirming August 24’s losses.

The shift in sentiment, favoring sellers, happens when most traders are neutral on the coin. In response to the CMC Crypto Fear and Greed Index, traders adopted a wait-and-see approach when writing on August 28 and are mostly neutral.

This has been the dominant sentiment since prices tumbled in early August when most traders scrambled for the exit, pushing sentiment to probably the most “fearful” territory since early September 2023. the sentiment chart, the one time traders were extremely greedy during the last 12 months was when Bitcoin rose to all-time highs, rallying to $73,800.

Subsequently, if prices are weak and sentiment is neutral, it could help to help optimistic bulls, at the least within the short term. A recovery above $63,000, helping reverse August 27 losses, may further spark demand. This expansion would be the constructing block for much more gains above August 2024 highs.

Why Is Funding Rate Positive Amid Falling BTC Prices?

Even with the optimism, it’s emerging that the typical funding rate across Binance, Bybit, and OKX, is in positive territory at 0.002%. Which means short-leverage traders are getting paid for holding their positions.

Typically, which means perpetuals are trading at a premium versus the spot price, a development that would incentivize more sellers and fuel the downtrend.

Normally, funding rates are positive when prices rally, pointing to bullish sentiment. It turns negative at any time when prices tank, meaning leverage short sellers need to pay those betting for prices to rally.

Feature image from Canva, chart from TradingView