Four Reasons Exist For Bitcoin To Keep Regaining Ground
The first cryptocurrency returned to the bullish zone for the market after the most recent surprising Bitcoin pump, but it was not arbitrary and there were numerous indications that a bounce was imminent. The same signs now indicate that the rally will go on.
Futures market for bitcoin
The two key factors that contributed to the first cryptocurrency’s extremely erratic price increase were the negative funding of open interest and the backwardation of BTC futures. Both of these indicators demonstrated how wildly oversold BTC derivatives were.
We observed a slight short squeeze in response to apparent purchasing power, which led to the rise above $21,000 in just one day.
Test of the Coinbase orderbook
One of the largest Bitcoin trading platforms in the world, Coinbase frequently reflects the aspirations of small-scale investors in the sector. Will Clemente claims that we recently witnessed a successful test of demand in the platform’s orderbook.
We can confidently state that the market is leaning toward recovery because the compositions of orders are leaning toward bids. The financing rates work similarly to how bears used to compensate bulls for initiating short orders.
Reversal of dominance
The dominance of the first cryptocurrency on the market has been eroding over the past several months as investors have seen no compelling reasons to invest in Bitcoin, whereas Ethereum offers greater intrinsic value than the virtual currency gold.
But with the update about to go live in a matter of days and Bitcoin having already fallen to its historical low, it is likely a hint of a shift in the balance of power that will either result in a BTC rally or a significant correction on the altcoin market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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