As a seasoned analyst with over a decade of experience in the volatile world of cryptocurrencies, I’ve seen more market swings than I care to remember. And while Bitcoin’s (BTC) recent high might be tempting, my gut feeling tells me we may have hit a local top at $68,500.
Over the last day, Bitcoin’s (BTC) value has gradually decreased, and it appears there’s a growing likelihood that its price might have reached its maximum at around $68,500.
Let’s examine the factors that explain why Bitcoin’s recent high might be a local top.
Bitcoin spot CVD remains negative
During the first quarter of the year, Bitcoin attained a fresh record high. One significant factor that increased throughout this time was the Cumulative Delta (CVD) of Bitcoin’s spot volume, which underscores the growing demand from individual investors trading on platforms such as Binance, Coinbase, OKX, and Bybit. This trend indicates strong buying pressure from retail investors.
Currently, the total trading volume for CVD (Cryptocurrency Volatility Dollar) is decreasing during this bullish market trend, indicating that retail traders are continuing to sell at higher price points.
In simpler terms, the on-chain expert known as XBTManager has pointed out ongoing transactions suggesting Bitcoin is being sold. He noted that Bitcoin has reached a point where it needs to make a significant move, entering what he calls a “decision period.
As a crypto investor, I’ve been noticing that our analyst suggests the upward trend might persist if trading demand escalates further. However, currently, there are indications of weakening which could potentially drive the prices down towards a support zone, around $63,000 to $64,000.
The Bitcoin-USDT futures market is overleveraged
As reported by CryptoQuant CEO Ki Young Ju, the current Bitcoin estimated futures leverage against the USDT pair across all exchanges has peaked at a record level.
In simpler terms, it’s evident that the crypto derivatives market as a whole, which includes Bitcoin futures, perpetual futures, as well as stablecoin pairs like USDT with Ethereum (ETH) and Tron (TRX), is currently showing signs of excessive borrowing or leverage.
It is important to note that prolonged periods of overleveraged futures are common in bullish environments, and Axel Adler Jr, a crypto researcher, believes in the possibility of a volatility shakeout, which can happen in either direction. Adler Jr said,
“Currently, leverage volume on the top three exchanges stands at 32%. A rise above 55% could trigger a cascade of liquidations.”
Bitcoin indicators show third bearish divergence
As a crypto investor, I’ve noticed that Bitcoin’s descending trend over the past six and a half months has recently broken, forming a sequence of higher lows. However, each time we reached one of these higher lows, an attempt to break above the resistance trendline failed. On the 12-hour chart, there seems to be historical evidence suggesting that another correction might be imminent.
According to the graph, every time Bitcoin creates a new lower high and touches its downward slope, it shows a bearish discrepancy compared to the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) line. In simpler terms, whenever Bitcoin makes a new higher peak but the RSI and MACD don’t follow the same trend, it suggests a potential downward movement.
Historically, such bearish divergences have often led to a decrease in price by around 25% and 30%. If this trend were to continue now, we might expect a drop equivalent to 25% from the current price, which would bring us back to the $52,000-$50,000 price range.
If the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), or both of these technical indicators reach a higher point than their previous peak, it will signal a new bullish trend for Bitcoin.
Read More
- DOGS PREDICTION. DOGS cryptocurrency
- SQR PREDICTION. SQR cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- KNINE PREDICTION. KNINE cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- EVA PREDICTION. EVA cryptocurrency
- METIS PREDICTION. METIS cryptocurrency
- HI PREDICTION. HI cryptocurrency
- STG PREDICTION. STG cryptocurrency
- UXLINK PREDICTION. UXLINK cryptocurrency
2024-10-17 18:56