June 15, 2024

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Latest Findings Show A Reduction In Sell Off, Is A Bitcoin Rally Ahead?

2 min read
Latest Findings Show A Reduction In Sell Off, Is A Bitcoin Rally Ahead?

Bitcoin and the broader crypto market surprisingly performed over the past week. At the beginning of the week, the market saw more movements to the south in most crypto asset prices. A few hours following the release of the US CPI data for September saw the entrance of the bears into the market.

However, almost all the tokens had a reversal in the direction of the trend. The bull suddenly appeared and forced massive volatility pushing the assets to the north.

The performance of the primary crypto asset, Bitcoin, was calm throughout the weekend. Bitcoin sustained its anchor at around $19,200 through the period. But some participants in the industry are wondering about a possible turn for the leading cryptocurrency.

Possible Price Spike With Present Indicators

According to indicators from on-chain platforms, BTC might record a more bullish trend soon. The sentiment is drawn from the indication of the Bitcoin futures market.

An analyst at CryptoQuant, Dan Lim, gave some supporting explanations for this positive trend expectation. According to him, the token currently has low selling pressure in the futures market.

Lim says there’s been a drastic decline in the BTC amount transferred from spot exchange to derivatives since October. He recalled that since the fall in June, the volume continued to rise, but Bitcoin retained its June low of $17,600. Currently, the volume is dropping sharply, negating any occurrence of intense selling pressure.

But, the funding rates of Bitcoin futures have become negative in the market. This was due to the decline in the price of BTC from $22,000 to the $19K level. Comparing these occurrences with the 2019-2021 period shows a drop in the metrics showing a low activity and demand in BTC futures market.

According to Greatest_Tracker, a CryptoQuant analyst, the indicator usually leads to a consolidation and range phase period. However, the analyst noted that extreme negative values might result in a short squeeze triggering a price reversal for Bitcoin.

Volatility Through Bitcoin Futures’ Stance

With the present condition of the Bitcoin futures, many predictions revolve around the price of BTC. But some traders are anticipating increased volatility following the market situation.

Michael Van de Poppe, a notable crypto trader, expected a price surge. However, he wrote that following four months of consolidation in prices; it’s possible to get massive market volatility. Van de Poppe noted that some people still expect a more bearish trend, but an increased northward move could be the odds.

But the worsening global macroeconomic conditions bring contrary opinions for some traders. Nicholas Merten, the founder of DataDash, indicated concerns with macro factors. He reported that the Nasdaq Composite went below its average performance for the first time in 14 years. It recorded a weekly close below the 200-week moving average.

The trader noted that the crypto market, especially BTC, will face more bearish trends in the future with such conditions.

Featured image from Pixabay and chart from TradingView.com