On-chain data for funding rates shows traders are once again piling into Bitcoin, the world’s largest cryptocurrency by market cap.Funding rates are an indicator of increased trading activity. Perpetual swap products allow traders to borrow in excess of the funds they hold—a process called using leverage—to place bigger bets for more gains while putting up a smaller amount of capital at risk.The excess funds are provided by the exchanges, which in turn charge interest from traders for allowing them to do so. High, positive funding rates mean traders are ready to pay high amounts as interest to place bets, while negative rates mean exchanges are ready to pay the trader borrowing from them.
“Funding has started to warm up again. Not exactly February’s levels but a notable jump nonetheless,” noted Lex Moskovski, the founder of crypto fund Moskovski Capital, citing Glassnode data. “People are getting increasingly bullish,” he added.
Funding has started to warm up again.
Not exactly February’s levels but a notable jump nonetheless.
People are getting increasingly bullish. pic.twitter.com/YQqa1D0rHv
— Lex Moskovski (@mskvsk) March 9, 2021
As the tweet shows, the funding rates of perpetual futures products—financial instruments that track Bitcoin or other cryptocurrencies and don’t have an “expiry” date—were reaching levels last seen in mid-February, right before Bitcoin started its run to set an all-high time of over $58,500.The rates are averaging around 0.06% at press time, or levels last seen on February 22, when Bitcoin started dumping after its ATH. They reached as high as over 0.14% on February 8, corrected to under 0.05% by February 10, before hovering in the 0.06-0.12% range for the next week at the time.Fund manager says buy Bitcoin dips at $40,000While the rates are suggesting surging price action ahead, a partner at a Hong Kong-based trading firm says a large dip could still occur.Annabelle Huang, a partner at the Amber Group, said in a statement to CryptoSlate that while Bitcoin seems to be consolidating over $50,000, the $40,000 price level was favorable in case of a market correction.“We note that 40-43k have been favorite levels to buy the near-term dip. BTC reclaimed the 50k level after the US passed the stimulus bill, and on the back of MicroStrategy and Meitu purchasing BTC,” she said, adding:
“However, concerns from the macro world around rates and DXY have sent equities across the board down, threatening crypto once again.”
Huang stated that there was a recent increase in interest levels from institutional players globally, while in China, a lot of high-network-individuals were additionally inquiring about how to add Bitcoin to their portfolio.Even Chinese businesses are betting big. Meitu, a Hong Kong-listed photo editing app, said last week that it picked up over $17 million in Bitcoin and $22 million in Ethereum, becoming the first Chinese company to do so.Bitcoin trades at $56,419 at press time. 
