In its latest monthly report, VanEck suggests that Bitcoin (BTC), the world’s leading digital asset, is displaying signs of a strong recovery similar to its previous market rebounds.
According to analysts Mathew Sigel and Nathan Frankovitz at VanEck, Bitcoin's robust network activity and a decline in future funding costs may indicate a potential resurgence. They noted,
“Bitcoin network activity stayed robust with an 83% surge in Ordinals inscriptions, while funding costs for Bitcoin futures dropped, reflecting a risk appetite seen in earlier market recoveries.”
Bitcoin Funding Costs Reflect Past Recoveries
A key indicator, Bitcoin's funding rates—fees paid by traders for holding perpetual futures contracts—have fallen to levels reminiscent of the recoveries in May and July. The report highlighted,
“Over the past 30 days, the 7 DMA annualized cost of funding Bitcoin futures has dropped from ~11.6% to ~8.8% for a relative decline of ~24%. These levels indicate a risk appetite similar to those seen during market recoveries following 20%+ BTC price drops in early May and July of this year.”
Despite the positive indicators, Bitcoin's recent decline in August has reduced the number of addresses in profit by approximately 9%. Currently, 84% of BTC users have unrealized profits, while the remaining users, primarily short-term investors, are experiencing losses.
The analysts emphasized that the recent downturns are typical retracements observed during Bitcoin bull markets. Furthermore, pressure from Bitcoin miners appears to be easing, with a noted reduction in their sell-offs.
“Transfer volumes from miners to exchanges fell 21% over the past 30 days, suggesting stabilization from miners after their post-halving selling increased significantly in June and July,”
As of now, Bitcoin's longer-term chart remains bullish, with the cryptocurrency breaking above the short-term supply zone at $63,000 and reclaiming the 200-day Simple Moving Average (SMA).
