As BTC surges above $ 57,000, CryptoQuant claims it could see a pullback using on-chain analysis. The analytics firm says a number of BTC indicators are reaching levels that signal a possible correction.

The first indicator is the Bitcoin Funding Rate, which is defined as the recurring payment that futures traders pay. A positive value means that most traders are bullish and the long side pays this fee to the short side.

While negative values ​​are the opposite; Traders are pessimistic about Bitcoin and the short side has to pay the long side.

Another indicator are Open Interest (OI) futures. This metric shows the total number of futures contracts opened at the end of the trading day.

Financing Rate and Futures Open Interest vs. BTC Price | Source: CryptoQuant

As the graph above shows, both indicators have been gaining in value recently. The red flags are where similar values ​​were previously seen on the chart, and every time the BTC price saw a correction shortly thereafter.

Also, it looks like both long-term and short-term holders are profitable at the moment, which means that at this level they are more likely to take profits, as shown by two indicators, the long-term SOPR and the short-term SOPR.

Long term and short term SOPR | Source: CryptoQuant

This fact, combined with the rising funding rate and the open interest of futures, leads Quant to believe that Bitcoin could see a retreat soon in the short term.

And it seems that the analytics firm’s prediction was inspired as Bitcoin price fell from a high of $ 57,627 to a low of $ 54,477 in the past 24 hours before returning to current levels of $ 56,324, which is a long one Candle generated on the 1-hour chart.

Source: TradingView

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