There are signs that Bitcoin price ongoing correction is one that is too aggressive – maybe BTC will bounce from here
After Bitcoin price peaked at $ 10,600, the bears reasserted control of the market. At press time, BTC was trading for $ 10,385, dropping to a low of $ 10,200 as sellers suddenly entered the market.
This is a divergence from the expectation analysts had for Bitcoin just a few hours before the move. Many thought a move above $ 10,500 after days of fluctuations was set to bring BTC back to $ 11,000. While this isn’t happening, there are signs that the ongoing correction is too strong a correction. That means it’s more likely that Bitcoin will rise from here.
Bitcoin price is likely to go up soon thanks to derivative data
It looks like derivative traders have been leading Bitcoin. According to ByBt, a website that tracks cryptocurrency derivatives, the majority of Bitcoin margin exchanges have negative funding rates at the moment. The funding rate is the fee that longs pay shorts to normalize the price of the derivative to the price of the underlying asset; when the funding rate is negative, that suggests that shorts are pushing down the price, as the derivative is trading below the spot market.
BitMEX currently has a negative funding rate of 0.0328% per eight hours, which is far below the baseline of 0.01% per eight hours. Other leading markets, such as OKEx and Huobi, are also currently negative.
Notably, Ethereum’s futures markets are also printing negative funding rates, which is only seen when derivative sellers are putting extreme pressure on. Negative funding rates are often seen before Bitcoin bounces. Likewise, an extremely positive funding rate is often seen before Bitcoin undergoes a correction.
The bears could continue to suffer bearish pressure if older markets, like the stock market and the forex market, open red in the coming hours.
As seen over the past few weeks, the legacy market decline has had an adverse effect on Bitcoin and cryptocurrency prices.
Bitcoin could soon hit $ 15.000 and here is why
According to the chief executive of crypto startup Civic, Vinny Lingham, there’s a good likelihood Bitcoin will soon begin a leg higher to $ 15.000.
He made this comment in reference to how $ 10.000 represents strong support:
“It looks to me that #Bitcoin is poised for another leg up, with an overshoot above $ 15.000, but then a retrace and heavy consolidation around $ 14.000 for a few weeks at least. I doubt this sub-$ 12.000 price holds for much longer and $10k represents strong support right now.”
It looks to me that #Bitcoin is poised for another leg up, with an overshoot above $15k, but then a retrace and heavy consolidation around $14k for a few weeks at least. I doubt this sub-$12k price holds for much longer and $10k represents strong support right now.
— Vinny Lingham (@VinnyLingham) August 28, 2020
Discussing the efficacy of his calls, Lingham noted to a commenter that he has rightfully called prior price action.
He added that he personally thinks that Bitcoin flips bullish on a macro scale if it converts $12,000 into support:
“I’m not a permabear or a permabull – I called the bubble and I called the bear market. The bear market is almost over, if/when we break and hold $ 12.000. So yes, I’m turning bullish.”
This sentiment is in line with a number of technical traders within the space. One historically accurate analyst, for instance, who predicted BTC’s V-shaped reversal in March says a rally to $ 17.000 is imminent. That’s not $ 15.000, of course, but there’s a growing sentiment that Bitcoin will gap higher.
You can see the BTC price here.
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