- The Bitcoin funding rates have reached a record-high level last seen during the bull run of April 2021, signaling caution for any rally ahead.
- On-chain analysis shows that despite widespread profit-taking and selling, Bitcoin price drawdowns have barely exceeded 20%.
Over the last two weeks, the Bitcoin (BTC) price has been facing significant volatility correcting more than 10% from its all-time high go $73,500 and moving all the way to $65,500, per the Crypto News Flash report. In the last 24 hours, the Bitcoin price has registered a partial bounce back gaining 2% and moving to $67,000. However, new investors should be careful as this is still not the end of the downtrend in Bitcoin.
As per the data from CryptoQuant, the Bitcoin funding rates are still at record high levels last seen three years ago in April 2021. “Funding rates represent traders’ sentiments in the perpetual swaps market and the amount is proportional to the number of contracts,” the team explained. Positive funding rates suggest that long-position traders are prevailing and are willing to pay funding to short traders.
The previous instance of funding rates reaching such heights occurred in April 2021. Subsequently, Bitcoin experienced a collapse from above $60,000 to below $30,000 in just three months.
Cryptocurrency analyst IncomeSharks shared a chart drawing the channel from the low to the high aligns almost perfectly with $100,000. The analyst added that selling acts as a bullish catalyst, and seasoned individuals in the market are aware of its tendency to flourish amidst fear and doubt. The below chart from IncomeSharks shows that the BTC price could take a sip under $60,000 before resuming its upward journey to $100K.
BTC Price Action Going Ahead
In the near term, the Bitcoin price might continue to face headwinds such as the drying up inflows into the spot Bitcoin ETFs. Although the net inflows remain positive at this point, the daily inflows have dropped to an average of $100 million from the highs of $300 million in the past week.
Even if the Bitcoin price faces downward selling pressure in the short term, analysts are bullish about the Bitcoin price post the halving event occurs.
According to DecodeJar, there is ongoing anticipation regarding the resolution of the current Bitcoin correction. The focus remains on whether the support at 65.5k will hold, potentially leading to the realization of the blue path (triangle).
Furthermore, both linear and log targets for the completion of wave 3 are identified at 90k and 115k respectively. While an expectation of wave 3 reaching around 100k has been maintained, confirmation is awaited.
#Bitcoin Update.
I'm still waiting to see which way this correction resolves, but as long as 65.5k holds it should be the blue path (triangle).
Either way, linear and log targets for completion of wave 3 are at 90k and 115k respectively. I have somewhat always expected wave 3… https://t.co/a39JtM1Nqg pic.twitter.com/4Za5ssYwp2
— DecodeJar (@decodejar) April 5, 2024
On the other hand, Bitcoin buyers have been strongly absorbing the selling pressure in the market. In a post on X (formerly known as Twitter) dated April 5, Checkmate, the pseudonymous lead on-chain analyst at Glassnode, presented data indicating that BTC price drawdowns have barely reached 20%.
Utilizing data from his charting suite, Checkonchain, he highlighted that despite widespread profit-taking and reactionary selling at peak levels, sellers have managed to lower the market by a maximum of 20%. This occurrence occurred only once, in mid-September last year, with subsequent drawdowns not exceeding 15.8%.
Still my favourite #Bitcoin chart of this cycle.
Market is absorbing hundred million dollar sell-side days, and the bears still haven't managed a 20% pullback.https://t.co/y9FSJ128xh pic.twitter.com/LjY6fLwtCE
— _Checkɱate
(@_Checkmatey_) April 5, 2024
(@_Checkmatey_)
