Bitcoin has gained more than 70% since October; today, some it broke above $19k after taking a rest since breaking the $18,000 level last week. But it’s to be seen if $20k is coming soon.

It has been just this year in March, during the global sell-off, that Bitcoin went down to $3,800, and this week, we made a new all-time high at nearly $19,420. We are just over 4% away from the all-time of $20,000.

Despite these huge gains, the market has been pointing out there has been no change whatsoever in the funding rate.

A funding rate is basically used to keep the price of the perpetual swap contract, futures contracts without an expiry date, in line with the underlying asset. Every 8 hours, you will either be paying or receiving funding if you have an open position.

In a positive funding rate, longs pay the shorts; in a negative funding rate, shorts are the ones paying the longs.

Crypto market traders have been pointing these past few weeks how there has been no change in the funding despite the rally.

Finally, bitcoin funding rates on major cryptocurrency exchanges have increased considerably over the past few days.

“Long positions are heavily paying shorts – potentially incentivizing more traders to start taking the other side,” noted Glassnode.

Just know that when the margin traders get wiped out, triggering a cascade, Greyscale and @BarrySilbert will be there to buy your liquidations.#Bitcoin pic.twitter.com/ZPtLnWOusy

— Hxro Labs (@RealHxroLabs) November 24, 2020

The funding started increasing towards the weekend when Bitcoin dropped to about $17,500 level. The digital asset has been primarily keeping between $18k and $19k, taking a breather before going higher.

The funding rate on Bybit is the highest, having reached 0.16% and 0.0113% on Binance, with the mean going to 0.093%.

It is possible; finally, the market will get to have a correction everyone is waiting for some time now. During the 2017 bull cycle, the market had several pullbacks of an average of 30%.

“BTC finally heating up. Every time funding popped like this in the last six months, a strong correction followed within 24H. Basis also popping,” said trader and economist Alex Kruger. However, he added:

“This time may be different though: retail mania kicking in. Google Trends aside, I have not seen such retail interest since Jan/2018.”

The trader is expecting a repeat of this past weekend in a few days.

“This is short term leverage piling on top of the systematic spot buying we've been seeing for BTC and ETH.

Leverage accrued after an extended rally makes longs vulnerable. The underlying spot bid is widespread, so thinking this time is different, and leverage has room to build up.”

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