Bitcoinâs price may be due for another correction despite a strong recovery from its weekend dump to $61,000, according to analysts at CryptoQuant.
In a community âquicktakeâ posted on Monday, Bitcoin and Ethereum trader GAAH noted that the prevailing bullish market sentiment may be getting too hot based on information from the perpetual futures market.
As the analyst noted, average 30-dy funding rates remain high for Bitcoin, even after its latest price dump. Their current level mirrors that during Bitcoinâs 2021 all-time high, which today serves as the digital currencyâs âgreatest resistance ever.â
âThe price is in a defined channel with around 20% expansion/retraction, an ideal scenario for large players to set up large positions,â wrote GAAH.
The last time Bitcoin funding rates were in an equally significant bearish position was in late 2022, when Bitcoinâs price was just 25% of what it is today. Since then, the asset has experienced multiple brief corrections of roughly 20%, though it hasnât seen a funding premium like today.
The assetâs rapid rise has incentivized many retail investors to start taking profits. The Spent Output Profit Ratio (SOPR) for short-term holders reached levels of âextreme greedâ in March, and has only now retreated towards a more neutral position.
Lead Glassnode analyst James Check commented on the same metric on Sunday, claiming its latest break back below a 1.0 ratio is a healthy sign for bulls. He said short-term holders are disproportionately at a loss compared to long-term holders, and that the market must shake out its weak hands before moving higher.
Bitcoinâs crash over the weekend triggered $700 million in liquidations within 24 hours. Many suspect it was sparked by escalating geopolitical tensions between Iran and Israel.
The post Why Another Bitcoin Price Dump Is Still Likely: CryptoQuant appeared first on CryptoPotato.
In a community âquicktakeâ posted on Monday, Bitcoin and Ethereum trader GAAH noted that the prevailing bullish market sentiment may be getting too hot based on information from the perpetual futures market.
Is Bitcoin Still Overheated?
As the analyst noted, average 30-dy funding rates remain high for Bitcoin, even after its latest price dump. Their current level mirrors that during Bitcoinâs 2021 all-time high, which today serves as the digital currencyâs âgreatest resistance ever.â
âThe price is in a defined channel with around 20% expansion/retraction, an ideal scenario for large players to set up large positions,â wrote GAAH.
The last time Bitcoin funding rates were in an equally significant bearish position was in late 2022, when Bitcoinâs price was just 25% of what it is today. Since then, the asset has experienced multiple brief corrections of roughly 20%, though it hasnât seen a funding premium like today.
The assetâs rapid rise has incentivized many retail investors to start taking profits. The Spent Output Profit Ratio (SOPR) for short-term holders reached levels of âextreme greedâ in March, and has only now retreated towards a more neutral position.
How To Spot The Next Bottom
Lead Glassnode analyst James Check commented on the same metric on Sunday, claiming its latest break back below a 1.0 ratio is a healthy sign for bulls. He said short-term holders are disproportionately at a loss compared to long-term holders, and that the market must shake out its weak hands before moving higher.
Bitcoinâs crash over the weekend triggered $700 million in liquidations within 24 hours. Many suspect it was sparked by escalating geopolitical tensions between Iran and Israel.
The post Why Another Bitcoin Price Dump Is Still Likely: CryptoQuant appeared first on CryptoPotato.
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