Bitcoin plummeted to USD 34,500 in the past hour on the top exchanges as selling pressure increased for the weekly close. The cryptocurrency also fell to $ 35,000 on futures exchanges, although spot sellers led the correction.
While some began to fear that a deeper correction was imminent, buyers intervened at key technical levels.
The cryptocurrency has risen to $ 38,000 since the writing of this article.
A crypto asset analyst shared the chart below after the bounce, noting how Bitcoin maintained key technical levels throughout the decline. The chart shows that Bitcoin’s BitMEX market maintained the USD 35,000 support along with a number of other moving averages that have held up quite well in recent weeks.
Chart of BTC's price action over the past two weeks from crypto-asset analyst "Edward Morra". Chart from TradingView.com
High funding rates are still a cause for concern
While Bitcoin held the decline well, analysts still note that a cause for concern is the extremely high funding rates in the crypto asset futures markets.
The funding rate is the recurring fee that long positions pay to short positions. This system ensures that the price of the future is naturally attracted to the price of the spot market over time.
Funding rates in the Bitcoin and Ethereum futures markets are skewed to the positive right now.
On Binance, it costs users 0.1% every ten hours in long BTC, while it costs even more on other derivatives platforms.
It costs even more to use Ethereum on those same platforms.
Still, the recent rebound has convinced analysts that the overall bull trend remains intact. One trader noted that the recent bounce is very similar to the bounce BTC experienced early this week, as it similarly plummeted to the $ 34,000-35,000 region before returning higher.
Chart of BTC's price action over the past week from crypto trader Pierre (@Pierre_Crypt0 on Twitter). Chart from TradingView.com
Related reading: 3 Bitcoin On-Chain Trends Show A Macro Bull Market Is Growing
Featured Image from Unsplash Chart from TradingView.com Price Tags: xbtusd, btcusd, btcusdt Bitcoin Explodes Past $38,000 Amid Rapid Recovery