Bitcoin Fails To Convince Fund Is In With $12K 'Still Likely'

Bitcoin Fails To Convince Fund Is In With $12K ‘Still Likely’

Bitcoin (BTC) may be hovering around its highest levels in months, but few are convinced that the bull market is back.

Ahead of a key weekly close, BTC/USD is hovering near $21,000, data from Cointelegraph Markets Pro and TradingView show, and analysts are nervous the good times are ending too soon.

Bitcoin will see a new “trough” before the bull run resumes

Bitcoin is dividing opinion after its week of strong gains. Warnings of a possible pullback abound, while others are already pitying the bears ahead of time.

“Now bears will get stuck in the vicious cycle of praying for retracements to go down, not realizing that the tides have turned for a while and we are going up,” Chris Burniske, former head of crypto at ARK Invest, summarized.

Even more bullish takes like Burniske’s, however, do not envision the rally continuing uninterrupted in a definitive end to the latest Bitcoin bear market.

Climbing up the classic “Wall Street Cheat Sheet” chart over the weekend, popular commentator Lemon predicted that the BTC/USD pair would fall further.

“I’m sorry, I have to be true to my thoughts, I think we’re here,” he said. saying Twitter followers, pointing to Bitcoin sentiment, and price, which is heading towards macroeconomic lows.

Annotated chart from the “Wall Street Cheat Sheet.” Source: Lemon / Twitter

Such a theory ties in with the more dismissive reactions to the latest BTC price rally, such as those from Crypto commenter Il Capo, who in recent days described it as “one of the biggest bull traps I’ve ever seen.”

“Despite the recent bounce, the bearish scenario has not been invalidated,” he said. wrote in part from a follow-up Twitter thread on January 14:

“If you have obtained benefits during these days, my most sincere congratulations, but remember that this is not a bad time to protect these benefits.”

He concluded that a macro low of $12,000 in BTC/USD was “still likely.”

BTC/USD annotated chart. Source: Il Capo de Crypto/ Twitter

Financing rates scare the mood

Data-wise, Maartunn, a contributor to on-chain analytics platform CryptoQuant, warned that BTC’s price correction could come sooner rather than later.

Related: Bitcoin Gained 300% in the Year Before the Last Halving: Is 2023 Any Different?

Funding rates on derivatives platforms, he wrote in a blog post Jan. 14, were reaching unsustainable levels.

“Bitcoin funding rates hit a 14-month high,” he noted.

With positive rates, those craving BTC are effectively paying to do so, signaling the popular belief that prices will continue to rise. This, in turn, can cause major choppiness if the price reacts opposite to the consensus, triggering a cascade of selloffs if support is broken.

“It is clear that traders are betting on higher prices. However, analysis of the funding rate chart suggests that might not be the case,” Maartunn concluded.

“On previous occasions when funding rates were as high as today, Bitcoin has taken a pullback.”

Annotated chart of Bitcoin funding rates. Source: CryptoQuant

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