History Favors Bitcoin Bulls Despite Crypto Hedge Funds Increasing Shorts
05 Abril 2024 - 4:30PM
NEWSBTC
Bitcoin may be dripping lower at spot rates. Still, one analyst is
unfazed, expecting the coin to reverse recent losses and snap up
firmly before peaking in December 2024. At spot rates, BTC is down
roughly 11% from 2024 peaks and struggling to generate sufficient
buying pressure, looking at the formation in the daily chart. Will
History Support Bitcoin And Rally To Fresh Highs? Taking to X, the
analyst highlights historical price patterns using the
2-week Fisher Transform indicator, a tool for picking out potential
reversal zones like double tops or bottoms. Though the technical
indicator lags, it has accurately picked out peaks in the
past. Related Reading: Dogecoin Deflates: What’s Behind The
20% Price Drop Amidst Memecoin Mania? In 2021, when Bitcoin soared
to over $69,000, the Fisher Transfer indicator printed a signal,
highlighting potential peaks. In the coming weeks following this
signal, prices crashed. By the end of 2022, Bitcoin had
fallen to as low as $16,000, accelerated by the collapse of FTX and
the bankruptcy of several other popular crypto hedge funds,
including Three Arrow Capital (3AC). The analyst also emphasizes
the importance of the indicator in differentiating between a double
top, mirroring 2017 and 2021, and a potential single peak later
this year. Presently, the trader said prices are approaching
2017 levels. Then, prices created what the analyst described as a
“more subtle initial rise” before peaking six months later at over
$20,000. If this leads, and the indicator “pauses” where it
is, Bitcoin will likely record a “single top.” However, only time
will tell where this top will be at. Hedge Funds Were Selling At
Tops? This prediction comes amid significant bearish bets by
leveraged hedge funds. Data from the United States Commodities
Futures Trading Commission (CFTC) reveals that these funds held
record “short” positions in Bitcoin futures contracts by last
week. Observers note this was the largest short position
since 2017, at over 16,000 contracts. By shorting, they expected
prices to dump, which is precisely what’s happening at spot
rates. Related Reading: Bitcoin Short-Term Holders Go On 1.2
Million BTC Buying Spree, Is Retail Finally Here? However, even as
hedge funds short, another analyst, responding to the trend, said
the futures premium remained high. This is a development that some
of these crypto hedge funds are taking advantage of. The number of
shorts could increase in the days ahead as United States Federal
Reserve officials appeared to be hawkish and upbeat economic data
started pouring in. Being a data-driven central bank, the Federal
Reserve might not slash rates as fast as initially projected.
Feature image from DALLE, chart from TradingView
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