As Bitcoin (BTC) approaches the $90,000 threshold, market sentiment has turned highly optimistic, raising concerns of a possible price pullback.
This outlook comes from Singapore-based crypto trading firm QCP Capital.
“With BTC breaking key resistance and moving beyond its multi-month range, the market is undoubtedly in a euphoric state. Perpetual funding rates are notably high, and basis yields have reached seven-month peaks,” QCP Capital stated in a Telegram update.
The trading firm remains bullish on Bitcoin in the long term but advises caution due to the risk of pullbacks, especially from leveraged positions facing liquidations.
Perpetual futures funding rates, which reflect the cost of holding bullish positions, have risen to 0.056%—the highest since March, according to Coinglass. This suggests that the market is crowded with leveraged longs, which could intensify any downward price movement if bullish traders start closing their positions. Such “leverage washouts” have historically triggered sudden, steep declines in crypto bull markets.
Elevated funding rates mean perpetual futures are trading at a premium over spot prices, while standard futures contracts show an annualized premium of over 15% across major exchanges, including the CME. This premium reflects the return potential of a cash-and-carry arbitrage strategy, which involves buying spot BTC while selling futures contracts to capture the spread.
Historically, sharp rises in these basis yields have tended to be short-lived, according to QCP Capital.
At press time, BTC was trading at around $88,300, marking a 30% gain over the past week, as per CoinDesk data. Overnight, prices hit a high of $89,622.
Bitcoin’s rally since Donald Trump’s November 5 election victory has fueled widespread optimism among traders, many of whom believe the upward trend will continue. The enthusiasm is evident on social media platform X, where BTC’s resistance levels generate considerable buzz.
