Skip to content

Bitcoin (BTC) may be hovering near its all-time highs in recent months, but few are convinced that the bull market is back.

BTC/USD remains near $21,000 ahead of key weekly close, data from Cointelegraph Markets Pro and TradingView show, with analysts nervous the good times are coming to an early end.

Bitcoin will see another ‘depression’ before the bull run resumes

Bitcoin divides opinion after its wild gains. Warnings of a potential pullback abound, while others are already prematurely giving mercy to the bears.

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

Even more bullish approaches like Burniske’s, however, don’t foresee the rally continuing unabated with the eventual end of Bitcoin’s recent bear market.

Uploading a classic “Wall Street Cheat Sheet” graph over the weekend, noted commentator Lemon predicted that BTC/USD is still headed lower.

“Sorry, I have to be true to my thoughts, I think we’re here,” he said told Twitter followers pointing to Bitcoin sentiment and price heading to macro lows.

Annotated Wall Street Cheat Sheet. Source: Lemon/Twitter

Such a theory ties in with more hawkish reactions to BTC’s recent price rally, such as from fellow Crypto commentator Il Capo, who described it in recent days as “one of the biggest bull traps I’ve ever seen.”

“Despite the recent jump, the bearish scenario has not been invalidated. wrote on Jan. 14 in part of the following Twitter thread.

“If you’ve taken a profit these days, my sincere congratulations, but remember, it’s not a bad time to protect those profits.”

He concluded that BTC/USD’s $12,000 macro low is “still likely.”

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

Funding rates dampened sentiment

Commenting on the data, Maartunn, an investor in CryptoQuant’s on-chain analytics platform, warned that a BTC price correction could come sooner rather than later.

Related: Bitcoin gained 300% in the year leading up to the last half-year. The year 2023 is an option.

Funding rates on derivatives platforms, he wrote in a January 14 blog post, are reaching unsustainable levels.

“Bitcoin funding rates hit 14-month high,” he noted.

With positive rates, those who miss BTC are effectively paying for it, indicating a widespread belief that prices will continue to rise. This, in turn, can cause major shocks if price goes against consensus, triggering a cascade of liquidations if support is broken.

“It is clear that traders are betting on high prices. However, an analysis of the Financing Rates table shows that this may not be the case,” concluded Maartun.

“On previous occasions when funding rates were as high as they are today, Bitcoin pulled back.”

Annotated Chart of Bitcoin Funding Rates: Source: CryptoQuant

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