Bitcoin (BTC), continued to trade at $49,206, up about 6% in the last two days, with the biggest cryptocurrency looking like it started the week on a high note. While BTC is still navigating a wave of volatility, the recent rise in price prompted the market’s expectation of Bitcoin’s annual high close.
The lead coin’s move above the critical resistance of $49,000 could be the last move to undo the $50,000 and above price close by the end of the year. However, with a number of metrics still trending downwards and network activity appears to be low, there are still some hurdles that plague BTC’s path.
Generally, BTC price When it peaks, the Open Rate RSI usually reaches the overbought zone, after which the price usually enters a correction phase. In particular, the “Open Rate RSI” peaks and the highest prices in the market were detected together.
As seen below, an overheated futures market with highly leveraged positions emerged as BTC hit a new high of $69,000.
Looking at the net flow in derivatives, the levels could match when BTC started a rally at $40,000 at the end of September. Negative derivatives Netflow and RSI of open interest point to a possible future market recovery, which could mean that the correction phase may be nearing its end.
However, retail sentiment for Bitcoin has broken its 30-day low, showing a wholesale drop in market confidence over the past month. Also, Bitcoin’s funding rates have seen several short-term dips into negative territory, pointing to a potential shift to a bearish outlook among derivatives traders.
Thus, a rise in the funding rate in the near term could signal a rekindling of enthusiasm alongside a better leveraged market. The same could push the spot prices of BTC upwards as well.
Skepticism Continues
Since the beginning of December, the amount of daily BTC addresses has dropped by 15% alongside Bitcoin’s downward price action. The same is a key piece of data that highlights declining interest in the leading crypto-asset and lower on-chain activity.
However, Bitcoin’s “Average Dollar Investment Age” has been on the rise for 20 days, indicating a network-wide accumulation trend, with most BTC remaining in their respective addresses, with daily transfer values falling and investors returning to a “holding” trend. This points to increased network inertia as Bitcoin’s recent price action has led to tremors.
So, while Bitcoin’s continued decline in on-chain activity may be a barrier to short-term price recovery, resurgent interest from derivatives and futures traders could pave the way for gains as HODLing continues.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.