Analysts have said in recent weeks that Bitcoin is finally finding a local top.
For the third time in a few months, the cryptocurrency was turned down in the $ 10,000 range. It was a rejection that led many to rethink their bullish stance on BTC because of the importance of the level.
Although derived data and simple techniques suggest that Bitcoin is far from excelling. The data shows this even after a rally of more than 150% from the March lows.
Bitcoin is unlikely to be at the top here, data shows
Financial derivatives – such as futures and options – have become increasingly important to crypto in recent months. The data that these markets provide is also increasingly important.
A top trader shared the chart below. It shows Bitcoin’s macro price action along with the BitMEX financing rate.
The financing rate is the compensation that long positions pay short positions to stabilize market prices. Extremely high or low financing rates indicate that one side of the market may be overloaded.
The chart indicates that the Bitcoin funding rate is not extremely high, as it has been on any medium-term summit in the past two years. This means that, should the historical precedent hold up, BTC has room to rally.
Technical indicators confirm the feeling that Bitcoin is not yet in the medium term.
As previously reported by NewsBTC, analyst Alex Fiskum explained that market sentiment and trader positioning show that moving from $ 3,000 to $ 10,000 was a “hated rally.”
That is, a majority of investors were on the sidelines or shortened this step because they were skeptical.
The Alice Capital employee has shared the table below to illustrate his point. The chart shows that Bitcoin investors are largely neutral, leaving room for buyers once they actually step in.
Kelvin “SpartanBlack” Koh – partner at The Spartan Group – shared This feeling.
Commenting on Fiskum’s chart, he wrote that crypto investors are still showing that they are “at some risk”. The options market, the relative strength index and the “fear and greed” index show this.
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It will not be easy
While the data shows that Bitcoin has room to rally, that doesn’t mean a rally will be a breeze from here.
A trader recently shared the image below. It is a graph showing that there is a bitfinex order book resistance of $ 10,000 for Bitcoin.
The chart is noteworthy as it has seen many movements in the BTC price in recent months, including the March lows and February highs.
Bitcoin is also approaching significant resistance in the medium term.
As previously reported by NewsBTC, a trader shared that BTC is currently approaching a technical level that has hit a local high four times in the past month.
If BTC finds a rejection here, for $ 9,600, it could lead to a retracement to the high $ 8,000.
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