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Identifying what Bitcoin needs to see an uptrend

January 25, 2024
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Identifying what Bitcoin needs to see an uptrend
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  • Bitcoin’s price may climb if Funding Rates decline further.
  • Coin’s exchange reserve has climbed since ETF approval.

A sharp decline in Bitcoin’s [BTC] price and Funding Rates may present a buying opportunity that may drive up the coin’s value, pseudonymous CryptoQuant analyst MAC_D noted in a new report. 

MAC_D found that the coin’s Funding Rates rose to a high of 0.049% on the 2nd of January after long traders piled on leveraged long positions.

This happened as the market awaited the U.S. Securities and Exchange Commission’s decision on BTC Spot ETF.

However, the high has since “cooled off” as the coin’s price trended downward. At press time, BTC’s Funding Rate was 0.001%, according to data from CryptoQuant.

Thus, bullish sentiment remained in the market despite the coin’s recent price action. 


Source: CryptoQuant

According to MAC_D, to end the current downtrend, a capitulation event that will result in the mass liquidation of these long positions must occur. 

The analyst remarked,

“If the price sharp drop(s) and the funding ratio becomes negative on the 1-hour chart, it could mean that leveraged traders are overly pessimistic about the market, which could be a good opportunity to buy back BTC.”

This means that for BTC to witness an upward price correction, two things must happen: a significant selloff that wipes out overextended long positions and a subsequent drying up of selling pressure. 

This would bring about a sharp decline in the coin’s value, accompanied by a negative funding rate on the 1-hour chart.

While this would indicate significant pessimism among leveraged traders, it could present a potential buying opportunity for those with a longer-term investment horizon.

See also  Bitcoin Miners Have Started 2025 on a Strong Footing, JPMorgan Says

Drop in profitable transactions

At press time, BTC exchanged hands at $39,956. According to data from CoinMarketCap, the coin’s value has plummeted by 13% since BTC ETFs became tradable on the 10 of January.

This price decline was due to increased profit-taking activity, which led to a rise in the coin’s exchange reserve.

Since the 10th of January, the total number of BTCs held across exchanges has climbed by 0.47%. According to CryptoQuant, 2.1 million BTCs were on exchanges at the time of writing.


Read Bitcoin’s [BTC] Price Prediction 2024-25


As coin sell-offs climbed, how profitable daily BTC transactions dwindled.

Since the 10th of January, the daily ratio of BTC transaction volume in profit to loss has dropped by 10%, according to data from Santiment. 

READ ALSO

Bitcoin nears $91K as buying pressure soars, but challenges emerge

Spot Bitcoin ETF Options – How U.S exposure is set to soar after CFTC’s notice


  • Bitcoin’s price may climb if Funding Rates decline further.
  • Coin’s exchange reserve has climbed since ETF approval.

A sharp decline in Bitcoin’s [BTC] price and Funding Rates may present a buying opportunity that may drive up the coin’s value, pseudonymous CryptoQuant analyst MAC_D noted in a new report. 

MAC_D found that the coin’s Funding Rates rose to a high of 0.049% on the 2nd of January after long traders piled on leveraged long positions.

This happened as the market awaited the U.S. Securities and Exchange Commission’s decision on BTC Spot ETF.

However, the high has since “cooled off” as the coin’s price trended downward. At press time, BTC’s Funding Rate was 0.001%, according to data from CryptoQuant.

See also  Bitcoin: Can ETF hype improve the state of BTC?

Thus, bullish sentiment remained in the market despite the coin’s recent price action. 


Source: CryptoQuant

According to MAC_D, to end the current downtrend, a capitulation event that will result in the mass liquidation of these long positions must occur. 

The analyst remarked,

“If the price sharp drop(s) and the funding ratio becomes negative on the 1-hour chart, it could mean that leveraged traders are overly pessimistic about the market, which could be a good opportunity to buy back BTC.”

This means that for BTC to witness an upward price correction, two things must happen: a significant selloff that wipes out overextended long positions and a subsequent drying up of selling pressure. 

This would bring about a sharp decline in the coin’s value, accompanied by a negative funding rate on the 1-hour chart.

While this would indicate significant pessimism among leveraged traders, it could present a potential buying opportunity for those with a longer-term investment horizon.

Drop in profitable transactions

At press time, BTC exchanged hands at $39,956. According to data from CoinMarketCap, the coin’s value has plummeted by 13% since BTC ETFs became tradable on the 10 of January.

This price decline was due to increased profit-taking activity, which led to a rise in the coin’s exchange reserve.

Since the 10th of January, the total number of BTCs held across exchanges has climbed by 0.47%. According to CryptoQuant, 2.1 million BTCs were on exchanges at the time of writing.


Read Bitcoin’s [BTC] Price Prediction 2024-25


As coin sell-offs climbed, how profitable daily BTC transactions dwindled.

Since the 10th of January, the daily ratio of BTC transaction volume in profit to loss has dropped by 10%, according to data from Santiment. 

See also  Stablecoin issuer Tether to enter into Bitcoin mining: Bloomberg
Tags: Bitcoinidentifyinguptrend

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Ethereum crosses $3.2K as L2 crosses new milestone: What now?

May 6, 2024

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D’CENT Wallet and MetaOasis Partner to Enhance Digital Access

D’CENT Wallet and MetaOasis Partner to Enhance Digital Access

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These developers are mashing ERC-20 tokens and NFTs together: Will it work?

These developers are mashing ERC-20 tokens and NFTs together: Will it work?

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Ethereum staking – All about Coinbase’s February market share of 11.4%

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Somnia Launches Playground App to Empower Metaverse Creators

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