Let me explain it simply.
Whenever funding rates start to cool down and then dump, it tells us one clear thing:
Too many traders were in long positions, and the market starts liquidating those longs.
Now look at the past cycles on this chart ๐
Every single time funding rates spiked, price eventually dumped.
This is how the market resets leverage.
So what is happening right now?
โข A lot of liquidity is built above the current price
โข Japan is heading toward an interest-rate hike
โข That means global liquidity will be pulled out
And whenever liquidity gets pulled out, price usually dumps.
This is not manipulation, this is how markets work.
If Japan hikes interest rates on 19 December, a strong dump in Bitcoin is expected, exactly like the pattern shown in the graph ๐
So what should you do now?
If you are holding risky assets: โข Be very careful
โข If you are in profit, itโs okay to secure some
โข If you are already in loss, donโt panic sell โ this dump wonโt last forever
After the dump, markets usually recover.
My overall view: Bitcoin is likely to stay bearish around Christmas ๐
From New Year onward, we can start seeing recovery and a bounce, especially until mid-January.
Trade carefully.
Control emotions.
Let the market do its job.
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