2020-6-9 21:00 |
Bitcoin has once again extended its long-held bout of sideways trading, as it has now been hovering around $9,700 for the past few days The crypto did decline to lows of $9,400 this weekend, but buyers quickly absorbed the selling pressure that was driving this movement It now appears that there are some factors that suggest a downside movement could be imminent If these factors are enough to shatter a key trendline Bitcoin bulls have been defending, it could be in for some serious losses Bitcoin has been hovering within the mid-$9,000 region in the time following its decline from the mid-$10,000 region to lows of $8,600. Its inability to garner any decisive momentum here suggests that its buyers and sellers have both reached an impasse and may also point to the possibility that its upwards momentum is beginning to stall. This notion is certainly supported by the countless rejections it has faced within the lower-five figure price region. In the near-term, analysts are closely watching Bitcoin’s funding rate and the number of underwater long positions for insight into where it may go next. If positive funding does push the benchmark cryptocurrency lower, it could put it at grave risk of declining beneath a key trendline. Bitcoin Consolidates as Bear-Favoring Factors Emerge At the time of writing, Bitcoin is trading up marginally at its current price of $9,730. This is around the level at which it has been trading at for the past week, although a short-lived bout of weakness seen yesterday did jeopardize this – pushing BTC as low as $9,400. The decline to these range lows did cause there to be a sentiment shift, and it may have been orchestrated by buyers in order to trap fresh short positions to provide fuel for an upwards movement. Despite this, two factors that do not favor buyers in the near-term are Bitcoin’s high funding and the massive number of underwater long positions on Bitfinex. One analyst spoke about these factors, noting that they have led him to flip neutral on BTC. “I flipped neutral for now. Funding has gone positive everywhere and there are a bunch of BFX longs underwater,” he said. Image Courtesy of Byzantine General BTC at Risk of Breaking Key Multi-Month Trendline If the aforementioned factors due place some downwards pressure on Bitcoin, they could shatter a key multi-month ascending trendline that has been guiding it higher. One analyst recently explained that it isn’t “decision day” for the crypto until it posts a clear reaction to this level, with a decline beneath it likely being enough to catalyze a decline into the $7,000 region. “Decision day has been postponed – slowly but surely reaching apex of greater trend. Not jumping on any swing trades it’s broke and thus we have a clear direction,” he stated. Image Courtesy of Teddy Featured image from Shutterstock.
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