Bitcoin and the aggregated cryptocurrency market have been seeing some strong price action in recent weeks, with BTC pushing to fresh yearly highs yesterday while many altcoins extend their parabolic momentum.
Analysts are now widely noting that they expect the cryptocurrency’s strong uptrend to persist in the mid-term, with its underlying strength likely translating into further gains.
One trader, however, expects it to see some short-term turbulence due to high funding rates across trading platforms.
He believes this indicates that bulls have become over-zealous and that a sharp downside movement is imminent.
Bitcoin Stabilizes Within Lower-$12,000 Region Following Yesterday’s Upswing
At the time of writing, Bitcoin is trading down marginally at its current price of $12,260. This is around the price at which it has been trading throughout the past several days.
Yesterday, the cryptocurrency was able to rally as high as $12,400 before it began running into heavy resistance. From this point on, it was able to maintain its strength, only ceding a small portion of its gains.
As it consolidates, the focus is once again being placed on altcoins – as many of them are continuing to add to their already impressive rallies.
BTC Funding Rates Point to Imminent Downside
One factor that may hamper Bitcoin’s short-term strength is the exorbitantly high funding rates seen on margin trading platforms.
High funding means that it is expensive for bulls to gain upside exposure to BTC, paying a high-interest rate every 8 hours to be in a long position.
One analyst is pointing to the current rates as evidence that a downside movement is imminent.
Image Courtesy of Jonny Moe.
It is important to note that funding-related dips are typically short-lived.
Featured image from Unsplash. Pricing data from TradingView.
Originally from Bitcoinist.com https://ift.tt/3ganzkE
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