After multi-month highs, Bitcoin price euphoria is limited at best, with Bitcoin traders dreading a reversion to macro lows.
Bitcoin may be at its highest levels in months, but few believe the bull market has returned.
BTC/USD stays near $21,000 ahead of a significant weekly close, according to data from Cointelegraph Markets Pro and TradingView, with analysts concerned that the good times will end all too soon.
After a week of rapid increases, Bitcoin has divided views. There are numerous warnings about a possible pullback, and others are even commiserating with bears ahead of time.
“Now bearish will be locked in a vicious loop of wishing for pullbacks to go lower, not recognising the tides have shifted for a moment and we’re moving higher,” Chris Burniske, former head of crypto at ARK Invest, put it succinctly.
Even more bullish views, such as Burniske’s, do not anticipate the rise continuing indefinitely, putting an end to Bitcoin’s recent bad market.
Over the weekend, prominent pundit Lemon forecasted that BTC/USD will fall even more by uploading the classic “Wall Street Cheat Sheet” picture.
“Sorry, I have to be honest, I think we’re here,” he warned Twitter followers, referring to Bitcoin sentiment — and price — approaching macro lows.
This idea is consistent with the more contemptuous reactions to the recent BTC price comeback, such as those of fellow analyst Il Capo of Crypto, who recently labelled it as “one of the biggest bull traps I’ve ever seen.”
“Despite the current bounce,” he wrote in part of a follow-up Twitter thread on Jan. 14:
“My heartfelt congratulations if you generated profits during these days, but remember that now is not a terrible moment to secure these profits.”
He stated that a BTC/USD macro low of $12,000 was “still likely.”
Using statistics as a guide, Maartunn, a contributor to the on-chain analytics website CryptoQuant, warned that the BTC price correction might occur sooner rather than later.
He said in a blog post on Jan. 14 that funding rates on derivatives markets had reached unsustainable levels.
“Bitcoin funding rates have reached a 14-month high,” he added.
With positive rates, individuals who want to hold BTC are practically paying to do so, reflecting a widespread conviction that prices will rise further. This, in turn, can generate tremendous upheaval if price reacts in the opposite direction of consensus, resulting in a cascade of liquidations if support is breached.
“It’s apparent that traders expect greater pricing. However, an examination of the Funding Rates chart indicates that this may not be the case,” Maartunn said.
“In the previous occasions where Funding Rates were as high as today, Bitcoin had a pullback.”