Markets
Is Bitcoin Ready for a Rally? These market indicators say the opposite
- Bitcoin speculators were reluctant to bid, due to stagnant Open Interest.
- Funding rates were only slightly positive and BTC may not be ready to recover.
Bitcoin [BTC] held on to the $67,000 support level, defending gains from the previous week and bulls looked to build on this level. At press time, the price was at $68.9K, and the $71.4K to $71.6K range is the next resistance zone.
The falling trading volume posed a threat to the bulls. Short term profitability of the holder also grew. THE days of parts destroyed the metric has been climbing recently, which could trigger Bitcoin volatility.
Assessing Speculator Sentiment
Source: Axel Adler on X
In a post on (formerly Twitter) crypto analyst Axel Adler observed that the weekly variation in Open Interest was neutral at -1%. This happened even though BTC had reversed the $67,000 level to support it and was aiming to push higher.
The lack of speculative interest over the past week indicates that most market participants have been sidelined. They were unwilling to bet on price movements and lacked bullish conviction. This could see BTC form a short-term range between $67,000 and $71.5,000.
The analyst also pointed out that this would have to change for Bitcoin to embark on its next trend.
Lack of bullish dominance suggests lethargic market
Source: Axel Adler on X
In another message, the analyst also showed that the spectacular price surges were accompanied by increases in financing rates. In late 2020 and early 2021, the massive rise from $20,000 was accompanied by periods of high funding rates that reached +0.15.
The rally since October 2023 has also seen the funding rate exceed the +0.03 mark. However, at press time it was +0.008.
Is your wallet green? Check the Bitcoin Profit Calculator
This shows a lack of bullish conviction. Combined with the decline in weekly trading volume, the evidence strongly suggests that Bitcoin is not yet ready to surpass the $72,000 zone.
Investors and traders should prepare for more limited price action in the coming weeks.