Bitcoin’s recovery from the overnight drop put the benchmark cryptocurrency in a dangerous position as the asset saw some wild overnight volatility which came after strong selling activity that liquidated long positions that sent the price reeling lower as we can see more in today’s Bitcoin news.
The selloff was quite intense and caused the aggregated market to face more selling pressure which is showing no signs of letting up. One analyst explained that the market trend in the near future depends largely on the derivatives market and noted that the funding rate is still high which could hamper the outlook for the time being. As such, he is calling the current crypto positioning dangerous after Bitcoin’s recovery from the overnight drop. BTC saw a huge drop and recovery which usually happens in a parabolic move higher.
One analyst explained that he is watching for the entire market to see prolonged weakness noting that the high funding rates on margin trading platforms indicate that a new wave of selling pressure could be imminent. With all that being said from a technical standpoint, BTC seems to be building more strength as its recovery from the overnight drop below $30,000 is picking up. Where will the market trend give us some serious insight into the aggregated markets’ mid-term outlook.
At the time of writing, BTC is trading down under 5% at a current price of $31,600 which is where it has been trading over the past few days but does mark a drop from its recent high of $35,000. The market trends depend on whether or not the bulls can confirm that the lower $30,000 region is a strong support zone. The continued bout of trading here follows the dip below this level which is a promising sign.
One on-chain analyst explained in a tweet that he believes BTC is still in a dangerous position after the overnight decline because funding rates remaining still incredibly high. He noted that BTC could continue higher in the short-term but it could be not as strong as it looks:
“I’ll patiently wait for the moment the funding rate cools down. BTC could go up more, but it’s too dangerous.”
The upcoming few days will shed some more light on Bitcoin’s near-term outlook and whether or not the crypto will be able to push higher.
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