Bitcoin Buying Pressure Rises, But Here’s Why A Pullback Could Be Coming
November 12 2024 - 1:00AM
NEWSBTC
A recent analysis from BaroVirtual, a CryptoQuant analyst, offers a
nuanced perspective on the current state of the Bitcoin market.
According to the analyst, fluctuations in the Coinbase premium—a
key metric that tracks the price difference between Bitcoin on
Coinbase and other exchanges—can offer significant insights.
Related Reading: Bitcoin ETFs See Historic Surge – Institutions Go
Bullish On BTC With $1.38 Billion Record Inflows Retail Leverage
And Premiums: A Double-Edged Sword Rising or elevated Coinbase
premiums typically suggest intense buying pressure, indicating
strong medium-term sentiment for Bitcoin. However, BaroVirtual
warns that in the short term, these high premiums may present a
double-edged sword, as they often precede a localized downward
movement in Bitcoin’s price. This phenomenon stems from market
dynamics, as high premiums reflect surges in demand that can lead
to overheating. When this occurs in combination with a high volume
of leveraged retail positions and an excessive number of long
contracts, the risk of a market pullback increases. Notably,
BaroVirtual pointed out that this scenario has been evident in some
Asian exchanges, where traders’ aggressive positions and leveraged
setups further amplified market vulnerabilities. The analyst’s
observations extend beyond the Coinbase premium to the broader
market context. When premiums soar, they signal strong demand and
positive sentiment among investors. This can provide a floor for
Bitcoin’s price, strengthening support levels and creating a
bullish sentiment over the medium term. However, in the short run,
the influx of highly leveraged retail positions can destabilize
market balance, leading to sharp corrections. High leverage implies
that even minor price swings can force liquidations, exacerbating
downward price movements. The CryptoQuant analyst emphasized
leverage dynamics’ major role in determining bullish trends’
sustainability. Retail traders’ aggressive positioning on some
Asian exchanges reflects a growing risk appetite, which may lead to
sudden market shifts if sentiment turns or if premiums dip. Bitcoin
Nears $100,000 After previously trading just above $83,000 earlier
today, Bitcoin’s price has now pushed further. So far, BTC has
achieved a latest all-time high of (ATH) of $84,929 less than an
hour ago. However, the asset has seen a slight correction with a
current trading price of $84,929, at the time of writing.
Regardless of this slight pullback, with the current bullish
momentum in Bitcoin, it is evident that the asset could continue
this rally and rise above $85,000 soon, bringing it closer to a six
digit ATH of $100,000 and beyond. Related Reading: Bitcoin Stock To
Flow Model Reveals $500,000 Price Target Renowned crypto analyst
known as Javon Marks on X has highlighted that Bitcoin still has
“more upside coming” especially since it recently broke above a
descending broadening wedge pattern. Prices of $BTC (Bitcoin),
after breaking out of this descending broadening wedge pattern,
have been climbing MAJORLY, moving roughly +24% since but there can
still be much more upside coming! The measured breakout target is
another near 20% away just around the $100,000 mark and…
https://t.co/F01HbCd1kv pic.twitter.com/k0bv9xqUwK — JAVON⚡️MARKS
(@JavonTM1) November 11, 2024 Featured image created with DALL-E,
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