Is Bitcoin closer to the top or the bottom?

Trading at a value of $31,759 at press time, Bitcoin’s net unrealized profit/loss was rejected as it entered the “euphoria” zone on the charts. This is an interesting development, especially since January 2021 so far has turned out to be a month of contrasts, with Bitcoin noting an ATH of near $42,000 and an apparent bottom of $27,290.

Since a near-miss of the euphoria zone does not signal that Bitcoin’s growth is stunted, there is scope for further price discovery and recovery in the following weeks. Instead, this may be considered a positive sign, as the last time Bitcoin was rejected entry into the blue zone, the price rose by 900% to hit the top in 2017.

To affirm the signal from the NUPL chart, turn to the Bitcoin Futures and Options market. At the time of writing, the Bitcoin Futures Funding Rate was below 0.01% on Binance coin margin. The number of shorts exceeded longs, with the same happening after a long time in the current market cycle.

The Bitcoin Options on CME signaled a drop in interest from institutions. Earlier this week, merely 8 contracts changed hands in the Options market and $35,000 strikes emerged as the hot spot in January. Determining whether the price is closer to the top or bottom may be a challenge since the price has been very choppy of late. With variations of 10%, in ups and downs over the past two weeks, the price seemed to be range-bound between $31,000 and $35,000.

It is likely that Bitcoin’s price would drop closer to the bottom if the Coinbase premium dropped, outflows fell, miners started selling on a large scale, or the Options market shifted weight to sellers and puts in the short-run. In fact, in a recent tweet, Analyst Joseph Young suggested that these are the top three situations in which Bitcoin’s price may hit closer to the bottom.

In the short-term, however, the price may remain below $35,000, closer to the top than the bottom, unless the range shifts from $31,000-$35,000 to $35,000 and higher. The active supply and increasing reserves on spot exchanges hint that this shift may not come soon though. Until then, the price will remain closer to the bottom, if $30,000 is to be taken as the new bottom.

Bitcoin’s price has more or less remained above $30,500 on the charts after its breakout past $25,000. What does this suggest? Well, this suggests that $30,000 may be the short-term bottom, until a trend reversal or breakout above the $35,000-level.

Sourse: ambcrypto.com

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Category: News | Views: 78 | Added by: danyagames2007 | Tags: #Bitcoin #Bitcoi Price #BTC | Rating: 5.0/1
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