Analyst says extreme pessimism in BTC derivatives signals rebound

Pessimism in the Bitcoin derivatives market has reached an extreme, a situation that has historically preceded significant price rebounds, according to an analyst. CryptoPotato reports that Jamie Coutts, a crypto market analyst at Real Vision, noted his firm's proprietary Bitcoin derivatives risk score has fallen to one. He added that the seven-day moving average of the funding rate in the perpetual futures market is in the bottom 3% of all readings since 2020. Coutts explained that such low levels have been observed 14 times in the past, followed by an average 30-day return of 20.8%. He compared the current market to periods like the 2018-2019 crypto bear market, the COVID-19 crisis, and China's 2021 Bitcoin mining ban, suggesting the approximately 50-day period of negative funding rates from February to March could set the stage for a recovery.