Bitcoin (BTC) may be hovering around a month’s high, but few believe the bull market is back.
Ahead of the key weekly close, BTC/USD remains close to $21,000, data from Cointelegraph Markets Pro and TradingView show, with analysts nervous about the good times ending all too soon.
Bitcoin to see new “depression” before bull run resumes
Bitcoin divides opinion after week of rapid gains. Warnings about the potential for backlash are plentiful, while others have warned before.
“Now the bears will be caught in a vicious cycle of praying for a pullback, not realizing that the tide has changed and we’re going higher,” Chris Burniske, former head of crypto at ARK Invest, summarized.
Even more optimistic takes such as Burniske, however, do not foresee a continuous uninterrupted rise in the definitive end to Bitcoin’s latest bear market.
Uploading a classic “Wall Street Cheat Sheet” graphic over the weekend, popular commentator Lemon predicted that BTC/USD would still go down.
“I’m sorry, I have to be right with my thoughts, I think we belong here,” he said toward Twitter followers, pointing to Bitcoin sentiment – and price – heading into the macro low.
The theory is related to a more dismissive reaction to the latest BTC price rebound, such as from another commentator Il Capo of Crypto, which he now describes as “one of the biggest bull traps I’ve ever seen.”
“Despite the recent bounce, the bearish scenario has not been invalidated,” he said write in part of a follow-up Twitter thread on January 14:
“If you have made a profit during the day, thank you sincerely, but remember that this is not a bad time to protect that profit.”
He concluded that the $12,000 macro low in BTC/USD is “still a possibility.”
Funding rates affect the mood
Turning to the data, Maartunn, a contributor to the on-chain analytics platform CryptoQuant, warned that a BTC price correction could come sooner rather than later.
Related: Bitcoin gained 300% in the year before the last half – Will 2023 be different?
Funding rates on derivative platforms, he wrote in a blog post on January 14, are reaching unsustainable levels.
“Funding rates for Bitcoin hit a 14-month high,” he said.
With positive rates, eager BTC is effectively paying off, reflecting the popular belief that prices will continue to rise. This can lead to major upheaval if price reacts to the consensus, leading to liquidation if support is broken.
“It is clear that traders are betting on higher prices. However, analyzing the Funding Rate chart shows that this is not the case,” said Maartunn.
“On previous occasions where the Funding Rate has been up to date, Bitcoin has retreated.”
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