“Markets have to digest some overbought numbers before trying for $50,000-$55,000 resistance,” a Zerocap analyst has said.
The crypto is currently selling for $45,000 or so after hitting a 24-hour high of $46,767. The temporary halt in price could be short-lived, however, as prices start toying with a major psychological level close to $50,000, according to some.
“The derivatives markets are long and perpetual funding rates are short positive, showing a short-term positive retail interest,” Toby Chapple, from Zerocap, said.
On the larger investment side, things seem slightly different to Chapple, who reports that calendar futures across both ether and bitcoin were “fairly compressed” showing an open interest increasing for short positions.
Bitcoin is higher by 50% over a three-week time frame, having broke a longer-term moving average on the stronger retail and institutional demand. Still, the crypto is giving off signs of buyer exhaustion as seen by the relatively strong index, an indicator used to measure a given trend.
“Markets need to take in some over-purchased levels before trying to go for $50,000-$55,000 resistance,” Chapple said.
And while bitcoin’s return after Ethereum’s “London” Hard Fork has aided prices, political turmoil in the United States along with China’s bitcoin crackdown are still “significant threats” to the digital currency market, Jehan Chu, partner at crypto investment firm Kenetic Capital, said this week.
“With the ‘Elon Effect’ now exhausted, bitcoin likely goes down at $50,000 before hitting sub-$30,000 levels, clearing a space for an incoming institutional catalyst to boost the price higher than the previous all-time highs,” said Chu.
In the short-term, a pullback is possible as shown by the amount of active bitcoin addresses starting to go down once again, according to data given to us by Glassnode.
Other top 20 cryptos over a 24-hour time frame were mixed with XRP and tron posting the highest gains while uniswap and internet computer lost ground.
Author: Scott Dowdy