Bitcoin fails to convince that a bottom is “still likely” at $12k

Bitcoin fails to convince that a bottom is "still likely" at $12k
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Bitcoin (BTC) may be circling their highs for months, but few are convinced that the bull market is back.

BTC/USD remains near $21,000 ahead of a key weekly close Cointelegraph Markets Pro and TradingView shows, analysts are concerned that the good times are coming to an end too soon.

Bitcoin will see a new ‘depression’ before the bull run continues

Opinion is divided after bitcoin’s rapid weekly gains. Warnings of a potential pullback abound, while others are already prematurely pitying the bears.

Chris Burniske, former head of crypto at ARK Invest, said, “Now the bears will fall into a vicious cycle of praying for pullbacks to come down, not realizing that the tides have turned for a while and we’re going to go higher.” summarized.

More optimistic approaches, such as Burniske’s, do not predict that Bitcoin will continue in the last bear market without a definite break.

Popular commentator Lemon, who uploaded the classic “Wall Street Cheat Sheet” chart over the weekend, predicted that BTC/USD would fall even further.

“Sorry, I have to stick to my point, I think we’re here,” he said he said Twitter followers are pointing to Bitcoin sentiment – and price – heading towards macro lows.

“Wall Street Cheat Sheet” annotated chart. Source: Lemon/Twitter

Such a theory is linked to more indifferent reactions to BTC’s recent price spike, such as that of another crypto commentator Il Capo, who described it as “one of the biggest bull traps I’ve ever seen.”

“Despite the recent jumps, the bearish scenario has not been invalidated,” he said he wrote Part of the thread that followed on Twitter in January. 14:

“If you’ve made a profit these days, congratulations, but don’t forget that it’s not a bad time to protect your profits.”

I conclude that a $12,000 macro low in BTC/USD is “still possible”.

BTC/USD chart. Source: Il Capo from Crypto/Twitter

Funding rates dampen sentiment

Addressing the data, Maartunn, a contributor to on-chain analytics platform CryptoQuant, warned that a BTC price correction could happen sooner rather than later.

Related: Bitcoin gained 300% a year before the last halving – is 2023 different?

Funding rates on derivatives platforms, o he wrote In a blog post in January. 14, was reaching unsustainable levels.

“Bitcoin funding rates hit 14-month high,” I said.

With positive rates, those longing for BTC are effectively paying for it, indicating a popular belief that prices will continue to rise. This, in turn, could lead to a major panic if price reacts against the consensus, leading to a cascade of cancellations if support is breached.

“Obviously, traders are betting on higher prices. However, an analysis of the Funding Rates table shows that this may not be the case,” concluded Maartunn.

“In previous instances where funding rates were as high as they are today, Bitcoin pulled back.”

Bitcoin funding rates annotated chart. Source: CryptoQuant

The views, opinions and opinions expressed herein are solely those of the authors and do not reflect or represent the views and opinions of Cointelegraph.