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Bitcoin (BTC) faced new doubts about the strength of its bull run on October 7, as analysts considered a potential reversal of Wednesday’s short squeeze.
Funding rate in the red zone
Data from Cointelegraph Markets Pro and TradingView tracked BTC / USD as it hovered near $ 54,000 after failing to establish support at the $ 55,000 mark.
The day before, Bitcoin had sharply hit highs of $ 55,700, which was accompanied by strong buying pressure.
However, as funding rates turn positive across exchanges, concerns on Thursday focused on what could end up being an opposing move to the downside.
Funding rates that have become too positive suggest that the market is expecting a further rise and the significant value is long BTC. Under such circumstances, a massive unwinding of positions could accelerate and intensify a downward movement, if it were to begin.
Investor mood was picked up by sentiment data, with the Crypto Fear & Greed Index hitting 76/100 on that day, representing “extreme greed”.
“Investors are extremely hungry for BTC right now,” trader and analyst Rekt Capital warned.
Preparation for profit taking
While below $ 10,000 from all-time highs at one point, Bitcoin is also facing significant resistance levels at $ 58,000, $ 60,000 and above on its way back to price discovery. .
Related: Price Spike: Are Whales Top Bitcoin Futures ETF Approval?
As Cointelegraph reported, October is expected to close just below highs, while November could see a return to lower levels before a December final erases current records.
Nonetheless, long-time market players are already advising an exit strategy this week, including John Bollinger, creator of the popular Bollinger Bands trading indicator.
Second objective achieved, $ BTCUSD. UpperBB grows with the rally. Keep a trailing stop like BBstop or a chandelier going. Everything is clear for now, but starting to look for signs of a top / exit. I am leaving for a few weeks of travel. Happy trading! #Bitcoin
– John Bollinger (@bbands) October 5, 2021
Bollinger Bands track the upward and downward volatility of an asset and currently suggest calmer conditions should prevail. However, when the bands tighten, volatility ensues.
Altcoins, on the other hand, are not expected to generate definitive cycle gains until next year.
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