Since funding rates have regularly been turning negative, or flat as was the case last week, price has continued to accelerate upwards. This will be very painful for short-selling traders but has proven to be another useful signal indicating that the price of Bitcoin was undervalued recently and needed to reset up to higher price levels.
Adoption Continues Regardless
While short-selling traders have been caught out on low timeframe moves for Bitcoin, there continues to be strong evidence of broad market adoption. This adoption will help to support and push up price as we move into the new bull market cycle.
While it is possible for a single entity to own multiple addresses, tracking the number of addresses over time does provide a useful measure of broad adoption.
It avoids issues of ‘entities’ tracking which is an alternative imperfect measure. When tracking entities, addresses from institutions such as exchanges can be classed as a single entity, even though they serve millions of customers.
Despite shortfalls that occur due to the nature of blockchains, we do see that the number of addresses holding more than 0.1BTC have actually accelerated during this late-stage bear market. This suggests that there are still a large number of people who believe in the relevance of Bitcoin in a world where governments are rapidly increasing their spending and deficits to levels that are completely unsustainable in the long-term.