Greeks analysts noted that borrowing rates on cryptocurrency #exchange Bitfinex have risen sharply, reaching 30% annual percentage rate (APR). Such major changes usually indicate a major shift in market activity, especially among large spot traders. It is about the fact that they have started to rapidly increase their positions, as a reaction to the recent correction in the #Digitalasset market.
Such an increase in rates is considered a strong bullish signal for the market, as it indicates an increase in borrowing demand among the big players. Usually, sharp increases in borrowing are associated with changes in trading volume and capital inflows. This in turn tends to push asset prices up.
It is interesting to note that over the past 2 years, cases where borrowing rates on #Bitfinex have risen to 30% or higher have often preceded significant rallies in the market. This is due to the fact that large traders usually start to aggressively increase their positions using borrowed funds, which creates additional pressure on the growth of quotes.
This phenomenon reflects the growing expectations of traders regarding future price movements. When traders start borrowing assets at high interest rates, it indicates confidence in market growth despite short-term fluctuations.
In addition, such a high borrowing rate may indicate a lack of liquidity in the credit sector, which also increases the cost of borrowing and reflects the high willingness of participants to pay for access to capital. In a situation where the market is showing bullish sentiment, such conditions could be a catalyst for asset prices to rise further. Thus, the sharp rise in rates on Bitfinex could be an early indicator of the start of a new bull cycle in the #cryptocurrencymarket , especially if historical trends continue.
