Recent Bitcoin Rally Differs from 'Overheated Market' in March

Recent Bitcoin Rally Differs from 'Overheated Market' in March

Bitcoin has once again been on the rise over the past few weeks, recovering much of the value that it lost during the recent crypto market downturn. However, according to a report by CoinDesk, this rally is different from the 'overheated' rally that was seen in March. The main difference between the two rallies is the macroeconomic environment. In March, the global economy was in a state of turmoil due to the COVID-19 pandemic. This led to a sharp sell-off in stocks and other risky assets, including Bitcoin. However, the current macroeconomic environment is much more stable. Interest rates have been cut by major economies and oil prices have declined, leading to a general increase in risk appetite. Another difference between the two rallies is the behavior of futures funding rates. Futures funding rates are a measure of the cost of borrowing Bitcoin to bet on its future price. When funding rates are high, it indicates that there is a lot of demand for borrowing Bitcoin, which can be a sign of an overheated market. In March, futures funding rates were extremely high, reaching as high as 0.1%. However, funding rates are currently within normal bullish levels, suggesting that the market is not currently overheated. Overall, the recent Bitcoin rally is different from the 'overheated' rally that was seen in March. The current macroeconomic environment is more favorable for Bitcoin, and futures funding rates are not indicating that the market is overheated. This suggests that the current rally is more likely to be sustainable in the long run.