Bitcoin is currently trading above $56k and is showing general bullish bias at the moment. However, despite the recent uptick in prices that have rejuvenated the digital asset, some estimates believe the index will soon retrace back to $50k and the build up from there. One analyst believes that it won’t happen and that the index will keep rising.
Bitcoin had a deep pullback after all-time highs recorded back in April. The index fell sharply in May and remained bearish for the next three months. It posted a price index of around $28.8k at one point before recovering strongly later on. Recently, it has went past $50k again and is sitting comfortably above $55k. However, the surge has led to some metrics flashing red.
The most important of these metrics is the funding rate for the futures contracts. Historically, the funding rate has, in part, helped determine the short-term trend for the digital currency. The funding rate has been either slightly negative or neutral after the strong surge above $50k. This means that futures contracts aren’t being set up with that much enthusiasm and the market isn’t that attractive for investors. According to the bear analysts, this indicator flashed red back during the price tanks earlier this year and they believe this can happen again.
But, the funding rate alone isn’t considered the only determinant of the price trend. There are many other factors too. They include actual price chart analytics including Relative Strength Index (RSI), net inflow of crypto into exchanges, Bollinger Bands, Moving Averages analysis and much more. Most of these indicators point to a long rally ahead.
Popular Bitcoin analyst for major coin blogs Michael Van de Proppe tweeted earlier:
#Bitcoin is most likely just continuing this grind towards the all-time highs.
Great bounce from $54K.
Highly doubt we'll see a retest at $50K happening.
— Michaël van de Poppe (@CryptoMichNL) October 14, 2021
He was also skeptical of the cryptocurrency’s bearish indicators and believes that the cryptocurrency is an altogether different beast now. Most of the on-chain and even off-chain indicators are showing a considerable rally for the digital currency. That is true to some extent as many indicators are indeed flashing green but some are not as good as bulls would hope.
Overall, the crypto sector is set for a big Q4 showdown that is for sure. Only time can tell where this bull run will eventually take us.
Image Source: pixabay.com
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