Bitcoin (BTC) may be circling its highest levels in months, but few are convinced that the bull market is back.
Ahead of the major weekly close, BTC/USD is still near $21,000, according to data from Cointelegraph Markets Pro and TradingView, with analysts worried about the end of the good times.
Bitcoin is facing a new “depression” ahead of a new bullish wave
Bitcoin divided opinion after a week of rapid gains. Many are warning of a potential rollback, while others are already sympathizing with the bears early on.
“Now the bears will be caught in the vicious circle of praying the retreats subside, not realizing that the tide has turned for a while as we rise,” summary Chris Burniski, former head of cryptocurrency at ARK Invest.
Even more bulls like Bernsk, however, don’t expect the rally to continue unabated at the eventual end of Bitcoin’s recent bear market.
Introducing the classic “Wall Street Cheat Sheet” chart over the weekend, famous commentator Lemon predicted that BTC/USD would drop further.
“Sorry, I have to be honest with my thoughts, I guess we’re here,” He said to our Twitter followers, pointing out Bitcoin sentiment – and price – heading towards macro dips.
This theory correlates with dismissive reactions to the latest Bitcoin price rally, such as the response from fellow Crypto commentator Il Capo, who in recent days called it “one of the biggest pitfalls I’ve ever seen.”
Despite the recent recovery, the pessimistic scenario has not been invalidated. he wrote In part of a subsequent thread on Twitter on January 14:
“If you make a profit during these days, then hearty congratulations, but remember that this is not a bad time to protect those profits.”
He concluded that an overall drop to $12,000 on BTC/USD is “still likely.”
Funding rates sum up sentiment
Turning to the data, Maartunn, a contributor to on-chain analytics platform CryptoQuant, warned that a BTC price correction could come sooner rather than later.
He wrote in a blog post on Jan. 14 that funding rates on derivatives platforms are reaching unsustainable levels.
“Bitcoin funding rates are at a 14-month high,” he noted.
With positive rates, those who want BTC are actually paying to do so, indicating a popular belief that prices will continue to rise. This, in turn, can cause significant turmoil if price reacts contrary to consensus, causing a chain of selling if support is broken.
It is clear that traders are betting on higher prices. However, analysis of the financing rates graph indicates that this may not be the case.”
“On previous occasions when funding rates were as high as they are today, Bitcoin has taken a hit.”
The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.