Bitcoin Nears Highs, But It May Not Be Ready for a Breakout; Here’s Why
- Bitcoin has seen some incredible strength throughout the past few days, with each dip being aggressively absorbed by buyers
- This has allowed the crypto to rally past the $18,000 level and gain what appears to be a strong and stable foothold here
- Where it trends in the near-term should depend largely on its continued reaction to this level
- One analyst is noting that BTC does look like it wants to test its post-2017 highs of $18,600
- That said, he also notes that this latest move higher is mainly being propelled by derivatives traders, with funding rates soaring
- This could be a grave sign that downside is imminent in the near-term
Bitcoin is in the process of pushing higher, with bulls aiming at testing its 2020 highs of $18,600 that were set just a few days ago.
How it reacts to this level in the near-term will depend largely on whether or not spot buyers will step up and take control of this movement, as one trader is noting that derivatives are currently the source of this upwards momentum.
He points to the high funding rates as a reason why this move may not be too long-lasting.
Bitcoin Pushes Higher as Bulls Target $18,600
At the time of writing, Bitcoin is trading up just under 4% at its current price of $18,550. This marks a serious upswing from its recent lows of $17,400 set after these highs were first tested earlier this week.
The strength seen across the aggregated market today has been quite intense, and whether or not it remains this way will likely depend on Bitcoin.
If it breaks above $18,600, the entire market could instantly see massive capital inflows that help send BTC towards $20,000.
Analyst: BTC May Not Sustain Short-Term Momentum
One analyst explained that Bitcoin might not be able to maintain its short-term momentum. He notes that the fact that derivatives volumes are driving this move is concerning.
He also points to high funding rates as one reason why it may soon see downside.
“BTC: Looks like this wants to go for the highs, but not sure if it’s ready for a real breakout yet. Upside been mostly pushed by derivs ~ funding is pretty damn high. Fading the first move ain’t no bad idea imo.”
Image Courtesy of George. Source: BTCUSD on TradingView.
Whether or not Bitcoin can post a high time frame close above this level will provide serious insights into where the market will trend next.
Featured image from Unsplash. Charts from TradingView.
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Cole Petersen, @Khareem Sudlow
