Bitcoin’s price has hit a new ATH after a long period of consolidation. At the time of writing, BTC is trading at $ 63.235, up 5.1% on the previous day and 7.7% on the 7-day chart.
Prior to the rally, data from Santiment indicated high levels of bearish sentiment on social media platforms. During the bullish price action, there was 1.36 million ATH address activity when BTC touched $ 63.4000.
Now the Fear & Greed Index is close to extreme greed. In the derivatives market, investors have raised the refinancing rate to 0.08% on all exchanges, data from Glassnode shows. A “bearable” level, according to Lex Moskovski.
#Bitcoin has hit ATH and the funding is bearable.
Good sign. pic.twitter.com/gfzsDFV42M
– Lex Moskovski (@mskvsk) April 13, 2021
However, this metric may increase over the next few hours. Over the weekend, as BTC gained momentum trying to break the $ 61,000 resistance, the funding rate rose to 0.16%. Levels that have not been reached since mid-February of this year.
According to a report by Arcane Research, the rise in this metric preceded a correction in BTC price. Since the beginning of 2021, when the refinancing rates are high, the price of BTC has followed, as investors have positioned themselves “strongly” upwards.
If this metric stays at current levels, the rally could be prolonged, but an increase in funding rates could be a key indicator of short-term bearish price moves, a return to support and further consolidation. The Arcane Research report states:
High refinancing rates and futures premiums indicate strong upward leverage. Leverage is an integral part of the liquidation recipe, and we wouldn’t be surprised if long liquidations were to be added soon.
There is currently no risk of a cascade of liquidations affecting the price development of Bitcoin. However, this seems to have been a predominant trend in the past few months.
On the bull side, trader “Pentoshi” said it was “unwise” to take a short position on Bitcoin. Pentoshi believes a 50-day period of consolidation will turn into support, and ATH suggests the market will accept the price of BTC. The dealer added:
(…) The market has accepted a price above the highs unless it’s a scalp. There is a clear trend and that trend has increased. Easy to steamroll.
The price of discovery of Bitcoin
Further data from Glassnode signals a correlation between the increase in USDT, USDC, the supply of BUSD and the price increase of Bitcoin. As shown below, the growth in market capitalization of stablecoins is an indication of the growing demand for BTC.
In the past two weeks alone, USDT supply has increased by $ 3.36 billion, Glassnode said. Meanwhile, the price of BTC has moved sideways but appears to have enough fuel to sustain the rally and strong support at $ 60,000, as Monitor Whalemap said:
60k is a great macro support now. A lot of Bitcoin has accumulated in this area, so the selling pressure will not be high there. Simple invalidation if we get into the red zone (just point it out for risk management purposes) Price determination activated.