Troubling Signs: Why One Analyst is Concerned About Bitcoin’s Latest Rally
- Bitcoin has been caught within the throes of an intense uptrend throughout the past several days and weeks
- This has allowed it to post notable gains, despite previously showing signs of weakness as it consolidated at the lower end of its macro trading range
- The cryptocurrency is now vying for a test of its high time frame resistance at $10,500
- One analyst is cautioning investors against growing too bullish when it comes to this latest upswing
- He is noting that BTC remains in a potential distribution channel that won’t be invalidated unless it posts a clean break above this crucial resistance
- The trader also notes that funding rates have soared – a historically bearish sign
Bitcoin and the entire cryptocurrency market are caught in the throes of an intense uptrend.
The benchmark digital asset saw a surge in buying pressure yesterday that allowed its price to rocket past its previous $10,000 resistance level.
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In the time since, it has shown some signs of stability as it hovers around this price level.
Analysts do believe that the cryptocurrency could be well-positioned to test its high time frame resistance at $10,500, and its reaction to this level will be crucial for understanding which way it trends next.
While speaking about this, one analyst cautioned investors against growing too bullish on BTC prematurely, as he notes that it remains stuck within a distribution channel.
Bitcoin Rallies to $10,300, But Has Yet to Test Crucial Resistance
At the time of writing, Bitcoin is trading up over 4% at its current price of $10,350.
The cryptocurrency has been able to stabilize around this price level in the time following yesterday’s intense upswing.
Analysts are now noting that $10,500 is the key level to watch, as BTC has posted three firm rejections at this level throughout the past six months.
Whether or not it can break above this level may be telling as to where it trends in the weeks and months ahead.
Bulls Beware: These Factors Could Stop BTC in Its Tracks
While speaking about $10,500, one analyst explained that it might be too early to be fully bullish on Bitcoin until it is firmly surmounted.
“While CT is euphoric with the 10k break, thinking that we are going straight to the ath, I remain cautious until the price consolidates above 10.5k. This level is very important (potential UTAD for distribution). Schematic is identical.”
Image Courtesy of il Capo of Crypto. Chart via TradingView.
The same analyst also notes that funding rates have skyrocketed across trading platforms. This is a historically grim sign signaling that a rally has overextended itself.
“As soon as the price has broken 10k, fundings have skyrocketed across all exchanges. This is NOT a bullish sign.”
Featured image from Unsplash. Charts and pricing data via TradingView.
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Published at Mon, 27 Jul 2020 23:00:53 +0000
