Bitcoin (BTC) may face a month of stagnation after de-leveraging long positions
The post Bitcoin (BTC) may face a month of stagnation after de-leveraging long positions appeared on BitcoinEthereumNews.com.
Bitcoin (BTC) had several stalled rallies in the past months, preventing the leading asset from moving into a higher price range. While accumulation continued, the recent unraveling of leveraged longs could lead to another month of stagnation. Bitcoin (BTC) bounced quickly from its lows under $50,000 and showed robust buying from whales on the spot market. BTC also rallied above $57,000 and held above $55,000 in the current week. But the bull market timeline may shift significantly, as reaching for a new high may take longer. BTC traded at $57,272.01, with trading volumes above $39B, down from $100B during the most active day after the crash. Another month may pass after the recent unraveling of leveraged positions, before enough open interest is able to shift price action again. BTC rallies usually happen in the span of a few short days, but take weeks or months of sideways price action. Historical data shows that after unraveling leveraged positions and especially after negative funding rates, BTC took about four weeks to move into a higher price range. BTC had two episodes of funding rate resets in Q2, resulting in a long climb to higher price tiers. The market correction on August 5 led to a period of rebuilding long positions. BTC is currently 60% longs against 40% shorts, though long positions also face a higher rate of liquidations. BTC also showed that open interest could recover quickly, as seen by the July de-leveraging. Additionally, the open interest crunch affected smaller markets, while baseline activity on Binance sees smaller fluctuations even during turbulent trading days. BTC awaits bullish sentiment above $58,000 Matthew Sigel, head of digital research at VanEck, showed the trend goes back historically, leading to BTC price stagnation after de-leveraging. “Table 1 illustrates forward returns after these seven long squeeze events,…
Filed under: News - @ August 8, 2024 11:24 am