Bitcoin Leveraged Positions Building Up: BTC To $50,000 Or $60,000?
September 09 2024 - 6:00PM
NEWSBTC
Bitcoin is firm at spot rates, looking at the development in the
daily chart. Even so, the downtrend remains, and price action
remains within a bearish breakout formation. This outlook follows
the dump on September 7 that saw the world’s most valuable coin
plunge, approaching the all-important round number, $50,000.
Bitcoin Leveraged Positions Building Up Technically, the downtrend
remains, especially if bulls can’t unwind the losses of September
7. From an effort-versus-result perspective, the trend set in
motion by September 7 will shape the short-term, possibly
accelerating the fall below August lows. Related Reading: FET
Teeters At Trendline: Will A Breakout Fuel A Run To $1.86? Amid
this development, one on-chain analyst notes that there has been a
massive accumulation of leveraged positions from March 2024. Though
it remains uncertain which direction prices will move, the current
state of affairs means sellers have the upper hand. If bulls take
over, this would be a massive sentiment boost for BTC bulls, who
have had to contend with sharp losses over the past three months.
Regardless of the direction, this build-up in leverage position
precedes a period of heightened volatility in the coming days.
While Bitcoin trends lower, sentiment has taken a hit, explaining
the shrinking trading volume over the past two weeks. Since late
August, BTC has fallen from around $66,000, losing nearly 20% by
last week’s lows. At the same time, volatility is
comparatively low and not unlike the state of affairs when BTC
turned the corner, sharply expanding from late February before
printing fresh all-time highs in mid-March 2024. Average Funding
Rate Is Bullish, Will This Change? Interestingly, despite the lower
lows, trading data shows that the average funding rate across
derivatives exchanges has remained bullish for over a year. This
development could be due to the shift in price action that saw the
world’s most valuable coin turn the corner, rising from late Q3
2023. The recovery saw BTC shake off weakness and explode to above
$70,000 after losses in 2022 that took the coin to as low as
$15,800. Related Reading: Bitcoin Rainbow Chart Forecasts An End To
Bearish Headwinds With $60,000+ Target For bulls to dominate in the
derivatives market, prices must recover steadily. A break above
$66,000 and July highs would likely spur demand, lifting the coin
above the multi-month resistance at $72,000. Nonetheless, for this
to happen, there must be inflows to spot Bitcoin ETFs. Falling
prices have accelerated outflows from this product, meaning
institutions are playing safe. So far, SosoValue shows outflows of
over $169 million for spot Bitcoin ETF issuers in the United
States. Feature image from DALLE, chart from Trading View
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