Analysts Project A Bearish Run For Bitcoin
An analyst contends that Bitcoin price will fall despite the massive rallying it has had this year.
Dyme, an options trader, avers that the crypto is heading towards a “perfect bearish setup.” He pointed to three converging negative indicators: the Rising Wedge, Bearish Divergence, and Overleveraged Longs as suggestions of a steep price correction in future trading sessions.
Historically, the stated indicators lead to price reductions of assets that are otherwise thriving. The Rising Wedge, for instance, appears when there’s an upside in an asset resulting in higher highs and lows that produces a conical pattern.
In the past, Bitcoin’s value always took a tumble when the market experienced a Rising Wedge pattern. This reality explains Dyme’s projection as the crypto is undergoing a similar phase.
Similarly, a Bearish Divergence implies a possible retracement in a bull market. This situation occurs when an asset attains higher highs as its momentum indicator such as RSI registers lower highs. The Bitcoin price chart at the moment points strongly to a possible trend replacement.
Some market statistics suggest that Bitcoin could currently be overleveraged. Catering Clark, a different analyst citing funding rates, open interest and futures premium demonstrated the risk in long positions. He wrote :
He claimed that the immediate retracement could see Bitcoin’s prices decline by between $700 and $1,000.
Moreover, Alex Krüger, a market analyst of repute, alluded to a looming retracement pattern on BitMEX. Recently, the derivatives platform’s funding rate gained by 0.12%. Typically, such a move portends a drop in Bitcoin prices.