Bitcoin, the largest cryptocurrency, has rebounded strongly from its bottom to hit the $23,000 mark. So is this the start of a bull market? After finally recovering from a month-long downtrend, the bitcoin funding rate had fallen below neutral two weeks ago. That has raised fears of another bearish trend. That quickly changed, however, with last week's data. This time around, bitcoin funding rates paint a better picture for digital assets.

The funds rate returns to neutral

Last week's Bitcoin funding rates were more optimistic than in previous weeks. This is because it continues to maintain its positive neutrality throughout the 7 days; At no point this week did the funding rate actually fall below neutral. It is the first time since March that the funding rate has remained above negative levels for a sustained week.

A rebound in funding rates is always a welcome change for markets, which is why last week's date still matters. In a market like this, where bitcoin continues to struggle to easily break $23,000, there needs to be a major change not only in sentiment but also in the amount of money being pumped into the space.

With the funding rate returning to neutral, it puts it on a neutral path again, something that hasn't happened to Bitcoin for much of the year so far. The trend that started in June has now reached an acceptable point, but if Bitcoin is to continue its bull market rally, the end result is still to find interest rates to turn positive.

Will Bitcoin recover?

Bitcoin is still trending at $22,800, which is surprisingly a support level for digital assets. The level continues to hold temporarily, but it will take a big push to get out of there. As funding rates recover, permanent traders may provide the boost needed.

As for leverage in the bitcoin market, it remains high. That means more traders are opening positions in digital assets. But it also puts them in a precarious position if liquidations can pile up quickly, especially below $22,000.

Still, bullish indicators remain strong, albeit weaker compared to last week. Resistance at $23,000 is not as strong as bears would like, leaving the next major resistance level well above $23,500. If bitcoin can break above its 50-days moving average again, then it is likely to surge above $24,000 again.

The bear has gone? Bitcoin closes bullish every month

After a brutal 56% correction in the second quarter, the leading cryptocurrency surged nearly 18% in July. The rise in prices over the past month has coincided with improving market sentiment. Although the US economy has entered a so-called "technical recession" after two consecutive quarters of negative growth, investors say they believe weak macroeconomic conditions are already priced in.

From a technical perspective, Bitcoin remains near its 50-month moving average. Meanwhile, the Tom DeMark (TD) serial indicator appears to be on the verge of presenting a buy signal in the form of a red nine candlestick on the monthly chart. A bullish pattern anticipates one to four candlesticks per month rising or the start of a new uptrend. The trading history shows the importance of the 50-month moving average. Approximately 3.67 million addresses purchased 2.47 million BTCS at an average price of $20,650. If this massive wall of demand persists, Bitcoin has a chance to validate the optimistic outlook. Further buying pressure around the 50-month moving average could push bitcoin towards $31,340 as IntoTheBlock's global money in/out model shows little resistance.

It is worth noting that a loss of support at $20,650 could lead to a significant downturn. A break below this area of interest could cause investors to panic and lead to a potential sell-off as market participants look to avoid further losses. The potential selloff could push bitcoin toward the next key support area around $11,600.