Mar 16, 2021
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The Bitcoin price dropped at the start of the new week after its strong rise. The price pullback sharply from the ATH $ 61,000 marks and declined to the $ 54,500 levels, wiping out nearly $ 6,000. Today, the largest cryptocurrency has recovered, trading around $ 55,000-$56,000, after falling almost 7% on Monday.
According to the famous analyst Joseph Young, three factors contributed to the weakening momentum. These were new weekly open, high funding rates, and the inflow of stablecoins that drove the market upward.
Bitcoin typically sees huge volatility when a weekly candle opens, according to the analyst. Because Monday’s trend can determine how popular cryptocurrency will perform for the rest of the week.
According to Joseph Young, when the BTC price declined, the BTC funding rates in the futures market were hovering above 0.1% across major exchanges. This means that the vast majority of market participants have taken or bought long positions in bitcoins; this shows that the market is overcrowded.
Bitcoin may be on its way to retest key support levels. But the record open position of $22.5 billion for BTC futures shows the bulls expect the uptrend to continue.
Before the drop occurred, on-chain data analytics platform CryptoQuant pointed to the massive BTC accumulation in Gemini. Young said, besides selling pressure from whales, another bearish sign was the recent BTC rally, led by stablecoin inflows to exchanges.
“Coinbase Premium Index was always significantly high when $BTC price breaking 20k, 30k, 40k, and 50k. It was significantly negative when the price breaking 60k. This 60k bull-run is not US institution-driven, it all came from stablecoins.”
As Bitcoin and other cryptocurrencies have rallied so much in a short period, there will certainly be some corrections, said Atichanan Pulges, CFO of Bitkub Capital Group Holdings Co. He also added:
“The long-term outlook remains very bullish, as many more leading financial institutions are considering adopting cryptocurrencies.”
As of this writing, BTC is trading at $55,437, correcting its new all-time high of $ $61,683. The price is down 1.41% over 24 hours and up 3.45% in a week.
Disclaimer: All information provided in the content is for informational purposes only and should not perceive as investment, financial, or trading advice. Any investment decision you make should be a personal choice based on financial knowledge, experience, and market research.