Bitcoin Price Smashes ATH to Hit Nearly $45,000; Funding Rates, Traffic, & Premium Goes Through the Roof
Funding rates went to 0.5% briefly as BTC price exploded and liquidated over $588 million dollar worth shorts. This of course, resulted in Binance becoming unusable while Coinbase trades at a $450 premium.
It seems the game is over for Bitcoin bears as the leading cryptocurrency rammed through a $42,000 all-time high, made on Jan. 8, to nearly hit the $45,000 mark.
This huge uptrend was the result of Tesla announcing that Elon Musk’s company has bought $1.5 billion worth of BTC to diversify and maximize their gains on their cash.
So, such moves are to be expected in response to the news. Moreover, the green monster candle, covering $37,950 to $44,900 move, was also the result of shorts getting liquidated.
In the past 4 hours, $588.27 million shorts were liquidated with the leading spot exchange Binance seeing the highest liquidations among all the exchanges, as per Bybt. Bitfinex, Deribit, and FTX saw the least amount of liquidations.
Even short positions on CME Bitcoin futures are being unwound by leveraged funds.
The price action and so much market volatility, also made some exchanges unusable, with Binance being one of them.
“Massive incoming traffic. Some lags observed in some regions. Auto scaling. Should catch up soon. All because of Elon,” tweeted Binance CEO, Changpeng Zhao.
BINANCE PLEASE FAM
— KSI (@KSI) February 8, 2021
However, the price action certainly resulted in a $452 premium on Coinbase. The gap between Coinbase Pro price (USD pair) and Binance price (USDT pair) indicates a strong spot buying pressure from Coinbase when the premium is high, as per data provider Crypto Quant.
On the derivatives market, at one point, the funding rate on Bitcoin perpetuals on Deribit went to 0.5%, which is currently keeping between 0.13% and 0.28%. The same has been the case for Ether but unlike Bitcoin perpetuals, the funding on ETH perpetual contracts is still keeping between 0.12% and 0.47%, as per Viewbase.
What we saw today, however, is expected to be just the beginning. Just last week, MicroStrategy's Michael Saylor, who also advised Musk on making Bitcoin a part of the company's balance sheet, held a conference for over a thousand companies to buy Bitcoin.
“Tesla bought Bitcoin. Every company will buy Bitcoin. Every country will buy Bitcoin,” tweeted Balaji S. Srinivasan, former CTO of Coinbase and General Partner at Andreessen Horowitz.
This, he said, will start by holding digital gold, then “eventually many different kinds of digital assets just to operate their business.”