Here Are The Reasons For Caution As Bitcoin Hits $10,440: TD9 And Exchange Inflows
TD9 and exchange inflows are influencing bitcoin prices. Here are the reasons and we find them interesting. Learn more about them.
Bitcoin And TD9
Slightly below the June peak, the price of Bitcoin hit $ 10,463 on BitMEX while the TD9 as well as exchange inflows suggest a BTC pullback that is very much possible.
The truth that slightly below the previous peak in June, the price of Bitcoin had hit $10,463 on BitMEX as the two indicators are signaling a BTC cool-off: TD9 and exchange inflows.
A part of the TD sequential system, the TD9 is a trend reversal indicator typically indicating if a rally or a correction is over-extended.Often suggesting that the ongoing rally could be overcrowded, is similarly exchange inflows, especially among whales.
Why Is It That The Ongoing Bitcoin Rally Is Over-Extended?
When the price of Bitcoin rises for nine consecutive days without a major pullback, a TD9 sell signal gets triggered essentially. It is similar to how nine candles all stay above the close of the four candles prior, then a TD9 lights up.
The price of Bitcoin has increased since July 19 from $9,219 to $ 10,463 as the four candles before the most recent nine daily candles closed at $ 9,150 making a TD9.
In itself, TD9 could be unreliable as it doesn’t take into account the fundamentals or technical of an asset whereas when BTC rallies for nine straight days it is sure to coincide with other factors that might hint at a pullback.
Analysts are exploring exchange inflows of BTC apart from the TD9 as it is according to CryptoQaunt CEO Ki-Young Ju that exchange inflows have spiked upon Bitcoin’s latest rally suggesting that some whales could be getting cautious. He further says, As BTC went up too fast, then it also seems like other whales think so too.
The Surging Futures Contracts
Across major exchanges like BitMEX and Binance Futures, the funding rates of perpetual futures contracts are also surging.
Unlike conventional futures contracts, perpetual futures contracts do not have any expiration dates. To incentivise users that bet against the majority of the market, as such exchanges use a mechanism called funding.
In case the Bitcoin futures market has more than 60% of longs, for example, the funding rate would then increase and incentivise short holders.
The funding rates on BitMEX and Binance Futures currently are 0.072% and 0.054% respectively as the usual funding rate of BTC perpetual contracts is now hovering at around 0.01%. All this indicates that the majority of the markets are longing that might, therefore, leave BTC vulnerable to the long squeeze.
An Alternative Scenario Of BTC
According to some other traders and technical analysts, they believe Bitcoin may continue to rally without major pullbacks.
A cryptocurrency trader, Zoran Kole had said it expects Bitcoin to stabilise at the $ 10,000 to $ 10,100 support range before moving upwards based on the market structure the trade explained that BTC surges to as high as $ 11,500. He further wrote that:
A high retest/ DBS Zone is looking to long-range as invalidation below weekly open/9900 sweep targeting 11.5-11.6 weekly kumo top.
The CEO of Real Vision Group Raoul Pal, was suggesting that the real rally of Bitcoin started when BTC crosses $ 10,500 as it corrects before hitting the crucial resistance level as an uncertainty. Further on he notes that he is expecting the momentum to continue and was quoted saying
Beginning over $ 10,500 is the real game in Bitcoin as maybe it corrects first and maybe not but I’m holding.
A cryptoasset analyst at global investment platform eToro Simon Peters shared his comments saying
The network metrics of Bitcoin is also looking pretty healthy as the Glassnode’s Reserve Risk Metric comes to be currently signaling an attractive risk-to-reward level indicating the confidence is high and the price is low.
Pointing toward a minor short-term pullback is several fundamental indicators as some traders still believe in the momentum of BTC that is too strong for a deep correction.
Finally, Where Is The BTC Racing To?
With effective ways, BTC is observed to be surging ahead with many futures contracts being held responsible. So when you are investing in Bitcoin, make sure you are well aware of the market cap of BTC at the moment. You will never be left out of the race once you are closely watching the price rises and falls for bitcoin. Fluctuations are part of the business cycle and so don’t worry about the lows, there are still more highs waiting for you.