Bitcoin fails to convince bottom is with $12,000 “still likely”

bitcoin (BTC) may be hovering around its highs in months, but few are convinced that the bull market is back.

Ahead of a key weekly close, BTC/USD remains near $21,000, data from Cointelegraph Markets Pro and TradingView shows, with analysts nervous that the good times are ending too soon.

Bitcoin will see a new “depression” before the bull run resumes

Bitcoin divides opinion after its week of rapid gains. Warnings of a potential pullback abound, while others are already sympathizing with the bears in advance.

“Now the bears will be caught in the vicious circle of praying for the pullbacks to come down, not realizing that the tides have changed for a while and we’re going higher,” Chris Burniske, former head of crypto at ARK Invest, summary.

However, even more optimistic takes such as Burniske’s do not foresee the rise continuing uninterrupted in a definitive end to Bitcoin’s latest bear market.

Downloading the classic “Wall Street Cheat Sheet” chart over the weekend, popular commentator Lemon predicted that BTC/USD would continue to fall.

“Sorry, I have to be true to my thoughts, I think we’re here,” he said. Told Followers on Twitter indicating Bitcoin sentiment and price are headed for macro lows.

Table annotated “Wall Street Cheat Sheet”. Source: Lemon/Twitter

Such a theory is tied to the most dismissive reactions to BTC’s latest price rally, such as fellow Crypto commentator Il Capo, who has described it in recent days as “one of the biggest bull traps I’ve ever seen. never seen”.

“Despite the recent rebound, the bearish scenario has not been invalidated,” he said. wrote as part of a follow-up Twitter thread on January 14:

“If you have made profits these days, my sincere congratulations, but remember that this is not a bad time to protect those profits.”

He concluded that a $12,000 macro lower on BTC/USD was “still likely.”

BTC/USD annotated chart. Source: Crypto’s Il Capo/Twitter

Funding rates disrupt the mood

On the data front, Maartunn, a contributor to on-chain analytics platform CryptoQuant, warned that the BTC price correction could come sooner rather than later.

Related: Bitcoin gained 300% the year before the last halving – is 2023 any different?

Funding rate on derivatives platforms, it wrote in a January 14 blog post, were reaching unsustainable levels.

“Bitcoin funding rates are hitting a 14-month high,” he noted.

With positive rates, those who aspire to BTC are actually paying to do so, indicating a popular belief that prices will continue to rise. This in turn can cause major upsets if price reacts opposite to consensus, causing a cascade of selloffs if support is broken.

“It is clear that traders are betting on higher prices. However, analysis of the funding rate chart suggests that may not be the case,” Maartunn concluded.

“On previous occasions when funding rates were as high as they are today, Bitcoin has experienced a pullback.”

Annotated chart of bitcoin funding rates. Source: CryptoQuant

The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.