Bitcoin's Three-Month Green Wave Triggers Caution, Not Celebration
Is Bitcoin heading towards a record-breaking $105K, potentially surpassing its previous peak? Examining the possibilities...
Bitcoin's (BTC) three-month surge has turned green, but the celebrations have been kept on ice. Why, you ask? Well, history has argued that that particular green-tint can often lead to sharp reversals.
As BTC edges closer to the critical $104,000 - $105,000 borderland, the subsequent days could prove pivotal. Will the rally persist or will it crumble quickly?
The Importance of the Three-Month Momentum
The latest data indicates that Bitcoin's three-month percentage change has undergone a significant, positive shift. According to Alphractal, these anomalies have a knack for hinting at market shifts, but one mustn't confuse them with guarantees.
In fact, history reveals that such surges have occasionally preceded abrupt losses, leaving traders shaken. The graph exhibits these percentage changes in correlation with BTC's price line, demonstrating moments when sudden reversals took place.
In short, the present scenario demands caution: momentum is emerging, but without sustained strength, especially beyond the $104K-$105K level, it could very well be a mirage meant to deceive.
Bitcoin's Complex Past and Evolving Sentiment
Much like the rising sun, a positive three-month flip can present two faces.
In the early days of 2018, the mid-2019 season, and the tail-end of 2021, similar green surges foreshadowed significant downturns, ensnaring momentum traders within painful rug-pulls. The current scenario echoes these past instances, mandating caution.
Let's not forget that the aggregated funding rate has been steadily climbing, reaching an impressive 0.0132 as of this moment. This suggests that bullish sentiment is increasing as traders grow more inclined to go long, though euphoria has yet to set in.
If the funding rate continues to escalate, the market will likely turn turbulent.
The $104K-$105K Threshold: A daunting barrier
At press time, Bitcoin was probing the $104K - $105K resistance hurdle. Momentum indicators are uncertain in this zone, with the RSI escalating to 74.46, hinting at an impending correction unless the bulls manage to sustain their impetus. Meanwhile, the OBV remains subdued, suggesting that volume isn't fully supporting the rally.
The 50-day as well as the 200-day Simple Moving Averages are conveniently positioned beneath, providing a safety net for long-term support.
If BTC breaks the $105K ceiling with forceful volume, an unprecedented journey towards new highs could be on the cards. Absent such a surge, rejection and consolidation appear more probable.
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- As the three-month momentum of Bitcoin (BTC) positively shifts, some investors are cautious, as history suggests that such surges can sometimes precede abrupt losses.
- The rising aggregated funding rate indicates an increase in bullish sentiment, suggesting that traders are becoming more inclined to go long, though euphoria has yet to set in.
- At the current resistance level of $104K - $105K, the RSI is escalating, hinting at an impending correction unless the bulls can sustain their impetus, while the OBV remains subdued, suggesting that volume isn't fully supporting the rally.
