CoinDesk 20 Index: 3,392.97 +1.17%
Bitcoin (BTC): $94,883.25 +1.51%
Ether (ETH): $3,300.99 +0.17%
S&P 500: 5,918.25 +0.16%
Gold: $2,676.97 +0.21%
Nikkei 225: 39,190.40 -1.05%

The crypto market has regained some stability, with BTC rising back to nearly $95K as order books signaled the presence of bargain hunters. Late Wednesday, prices tested the long-standing support zone of $90K-$93K, which has successfully halted downward movements at least six times since the second half of November. This latest bounce will be tested by Friday's U.S. nonfarm payrolls report, which is anticipated to show an addition of 164,000 jobs in December, following November's gain of 227,000, per FXStreet. The unemployment rate is expected to match November's pace of 4.2%, while average hourly earnings are projected to cool slightly to 0.3% month-on-month, down from 0.4%.

Bearish sentiment in the altcoin market could be ripe for contrarian risk-on traders, with top memecoin DOGE a likely beneficiary, according to analytics firm Santiment. “Since its peak exactly one month ago, Dogecoin has shed -28% of its market cap. Crowd sentiment has been near its lowest point over the past year. (This) means there is actually some nice upside to be a daring contrarian toward DOGE (in particular) if crypto markets begin to trend upward again,” the firm added, with crowd sentiment on DOGE currently at low levels of 1 out of 5. Futures markets for DOGE set a new record for open interest late Tuesday, though they have since tapered off alongside a market-wide decline.

U.S.-listed bitcoin miners accounted for 25.3% of the global network in December, Jefferies said in a research report on Thursday. The bank cut its price target for MARA Holdings to $20 from $24, while maintaining its hold rating on the stock. Mining profitability improved in December as the average price of bitcoin gained 15%, outpacing the increase in the network hashrate, which was 6.5% higher, the report said. Average daily revenue was $59,585 per exahash, a 7.1% increase from November, Jefferies said. U.S.-listed mining companies mined 3,602 bitcoin in December versus 3,404 the month previous, the bank said. Jefferies noted that MARA mined the most bitcoin last month with 890 tokens, followed by CleanSpark with 668.

Bitcoin has not broken below $90,000 since Nov. 18, and continues to swing between $90,000 and $100,000. The sentiment generally flips bullish when bitcoin approaches $100,000 and investors try to continue the bull market.

Derivatives in bitcoin play a large part in these volatile price swings. One metric that traders keenly observe is the futures perpetual funding rate. This is defined as the average funding rate (in %) set by exchanges for perpetual futures contracts. When the rate is positive, long positions periodically pay short positions. Conversely, when the rate is negative, short positions periodically pay long positions.

As of Thursday, Glassnode data shows that the funding rate briefly went ( -0.001%), the first time this year and only a few times since November. This lead to a leverage flush and a sentiment re-shift before bitcoin moved back above $94,000. To compare how mild the negative funding rate was on Thursday, during covid-19 in March 2020, we saw negative funding rates peak at (-0.309%).

A negative funding rate doesn't always lead to immediate price rebounds or bottoms, but can be watched alongside other price-chart tools and technical indicators to form a market view.

- Omkar Godbole