Bitcoin is trading at $ 49,206, up nearly 6% in the past two days, and the top coin appears to have started the week on a high. While BTC is still experiencing a surge in volatility, the recent uptrend has rocked the market in anticipation of Bitcoin’s highs for the year.
The king’s coin movement above the major resistance of $ 49,000 could be the last move to recapture it Prices of $ 50,000 or more close at the end of the year. However, with a number of indicators still trending downward and network activity appearing to be low, there are a number of hurdles still standing in the way of BTC.
Price of an intersection
In general, when the price of BTC hits its high, the Open Interest RSI usually hits the overbought zone, after which the price usually starts a correction. In particular, Open Interest RSI peaks and market price peaks were found together.
As can be seen below, we had an overheated futures market with heavily leveraged positions when BTC hit a new high of $ 69,000.
Source: CryptoQuant
If you look at the net flows in derivatives, you can stick to the levels when BTC started a rally of $ 40,000 in late September Correction phase may come to an end.
However, retail sentiment towards Bitcoin has fallen to a 30-day low, indicating a decline in wholesale market confidence over the past month. Additionally, Bitcoin’s funding rate has fallen into negative territory for the short term, suggesting a potential shift towards a bearish outlook for derivatives traders.
Source: Sanbase
A short-term increase in funding rates could therefore mean a touch of euphoria combined with a more leveraged market. The same could also push BTC’s spot price in the right direction.
There is still skepticism
Since the beginning of December, the daily number of BTC addresses has decreased by 15%, along with the downward movement of Bitcoin. The same highlights the declining interest in the top coin and lower on-chain activity.
Source: Sanbase
However, the average investment age of Bitcoin in US dollars has risen for 20 days, signaling a network-wide accumulation trend with most BTC at their respective addresses, a decline in the daily transfer value and investors turning to HODLing. This further shows the increasing inertia of the network as Bitcoin’s recent price action led to the shake.
So while Bitcoin’s continued decline in on-chain activity could hamper its near-term price rally, renewed interest from derivatives and futures traders could pave the way to profit as HODLing continues.