© Reuters. Bitcoin shows signs of exhaustion as bulls fight for next step
The market is showing signs of exhaustion as the upside pressure begins to ease, according to data from the network and CoinDesk sources.
The cryptocurrency is currently changing hands for about $44,000, after peaking at $46,767 in 24 hours. A temporary stay in price may be short-lived, however, as prices begin to face strong resistance around $50,000.
“Derivatives markets are long, perpetual financing rates are positive for shorts, indicating positive short-term retail interest,” said Toby Chapple, head of trading at digital asset firm Zerocap.
On the institutional side, things look a little different. According to Chapple the calendar futures for both Bitcoin and for were “very compressed”. These point to the growth of open contracts for short positions.
Bitcoin has gone up, but shows difficulty in keeping up
The market went up 50% in a period of three weeks. Thus, it broke a long-term moving average due to strong institutional and retail demand.
Still, the cryptocurrency is showing signs of exhaustion, as seen by the Relative Strength Index, an indicator used to measure a particular trend.
“Markets need to digest some overbought levels before trying to hit a $50,000 – $55,000 resistance,” Chapple said.
And while the Bitcoin rally behind Ethereum’s Hard Fork “London” helped boost prices, political tensions in the US and China remain a “significant threat” to the market.
Jehan Chu, managing partner of Hong Kong-based cryptocurrency investment firm Kenetic Capital, said:
“With the ‘Saylor’s Rise’ and ‘Elon Effect’ exhausted, Bitcoin is likely to falter at $50,000 before dropping to levels below $30,000, making room for a new year-end institutional catalyst to overcome historic highs.” , Chu said in relation to a mid-term forecast on prices, referring to Michael Saylor of MicroStrategy and Elon Musk of Tesla (NASDAQ:).
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