Bitcoin (BTC) faced fresh doubts over the strength of its bull run on Oct. 7 as analysts eyed a potential reversal of Wednesday’s short squeeze.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Funding rates in the red zone
Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it hovered near $54,000 after failing to establish support at the $55,000 mark.
The previous day had seen an abrupt surge to highs of $55,700 for Bitcoin, which was accompanied by major buying pressure.
As funding rates flip positive across exchanges, however, concerns on Thursday focused on what could end up being an opposing move lower.
Funding rates turning overly positive suggest that the market is expecting further upside and that significant value is long BTC. Under such circumstances, a mass unwinding of positions could hasten and intensify a downward move, should it begin.
Bitcoin funding rates vs. BTC/USD chart. Source: Bybt
The mood among investors was echoed by sentiment data, with the Crypto Fear & Greed Index hitting 76/100 on the day, representing “extreme greed.”
“Investors are extremely greedy towards BTC right now,” trader and analyst Rekt Capital warned.
Crypto Fear & Greed Index as of Oct. 7. Source: Alternative.me
Preparing for profit-taking
While under $10,000 from all-time highs at one point, Bitcoin additionally faces significant resistance levels at $58,000, $60,000, and more on the way to returning to price discovery.
As Cointelegraph reported, October is slated to close just below the highs, while November could see a return to lower levels before a December finale obliterates current records.
Nonetheless, longtime market participants are already advising an exit strategy this week, among them John Bollinger, creator of the popular Bollinger Bands trading indicator.
Bollinger bands track upward and downward volatility of an asset and are currently hinting that calmer conditions should prevail. When the bands narrow, however, volatility follows.
BTC/USD 1-day candle chart (Bitstamp) with Bollinger bands. Source: TradingView
Altcoins, meanwhile, are not expected to deliver definitive cycle gains until next year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Recommended Content
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.