Bitcoin Fails to Convince $12K Bottom ‘Still Likely’

Bitcoin (BTC) may be hovering around its highest levels in months, but few are convinced that the bull market is back.

Ahead of the key weekly close, BTC/USD remains near $21,000, data from Cointelegraph Markets Pro and TradingView show, with analysts nervous that the good times are ending too soon.

Bitcoin to see new ‘depression’ before bull run resumes

Bitcoin is divided after a week of rapid growth. Warnings of a potential pullback are numerous, while others are already sympathizing with the bears ahead of time.

“Now the bears will be caught in a vicious cycle of praying for pullbacks to go lower, not realizing that the tide has shifted for a while and we’re going higher,” Chris Burniske, former head of crypto at ARK Invest, concisely.

Even more optimistic views like Burniske’s, however, do not predict an uninterrupted continuation of the rise and an eventual end to the latest Bitcoin bull market.

Uploading a classic “Wall Street Cheat Sheet” graphic over the weekend, popular commentator Lemon predicted that BTC/USD would continue to fall.

“Sorry, I have to be true to my thoughts, I think we’re here,” he said Twitter followers, indicating bitcoin sentiment – and price – are heading towards macro lows.

“Wall Street Cheat Sheet” chart with comments. Source: Lemon/Twitter

Such a theory has been linked to more dismissive reactions to BTC’s latest price spike, such as those from fellow Crypto commentator Il Capa, who described it in recent days as “one of the biggest bull traps I’ve ever seen.”

“Despite the recent bounce, the bearish scenario has not been reversed,” he wrote in part of a follow-up thread on Twitter on January 14:

“If you have made a profit during these days, my sincere congratulations, but remember that it is not a bad time to protect these profits.”

He concluded that a macro low of $12,000 on BTC/USD “remains likely.”

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

Funding rates spooked sentiment

Commenting on the data, Maartunn, a contributor to on-chain analytics platform CryptoQuant, warned that a BTC price correction could come sooner rather than later.

Related: Bitcoin Gained 300% in Year Before Last Halving — Is 2023 Different?

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

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

With positive rates, those longing for BTC are effectively paying for it, indicating a popular belief that prices will continue to rise. This in turn can trigger a large reversal if the price reacts against consensus, triggering a cascade of liquidations if support is broken.

“It is clear that traders are betting on higher prices.” However, an analysis of the financing rate graph suggests that this may not be the case,” concluded Maartun.

“On previous occasions when funding rates were as high as today, Bitcoin had a pullback.

Bitcoin funding rates chart listed. Source: CryptoQuant

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