Bitcoin Futures Hint of Low Selling Pressure and Price Reversal

Bitcoin’s (BTC) price remained stable over the weekend, staying around $19,200 price levels for now. Investors have been largely confused about where Bitcoin might be headed next. Some of the on-chain data indicators show that BTC could be in for a price surge to the north according to the Bitcoin futures market.

Dan Lim, an analyst at CryptoQuant, pointed out that Bitcoin is facing less selling pressure in the futures market. He wrote:

The amount of Bitcoin sent from the spot exchange to the derivatives exchange has decreased sharply since October. Since the June decline, this volume continued to increase, but Bitcoin held the June low at $17,600 and now volume is dropping rapidly, reducing the possibility of strong selling pressure.

At the same time, however, Bitcoin futures funding rates in the futures market have turned negative as the BTC price declines from $22,000 to $19,000. Compared to the period 2019-2021, these calculations are very low, indicating a massive lack of demand and activity in the futures market.

Another CryptoQuant analyst Greatest_Trader explains that such an indicator usually results in the period of “consolidation and range phase”. He further explained:

“… extreme negative values ​​increase the likelihood of a short-squeeze and can cause a reversal in the cryptocurrency’s price.”

Bitcoin Futures and Volatility

While market experts predict which direction Bitcoin will swing, some traders expect greater volatility ahead. Popular crypto trader Michael Van de Poppe wrote:

Question of time before massive volatility hits the markets, after four months of consolidation. The majority still assume we will continue to go down with the markets, but I think the odds for upward momentum have increased.

But as global macro conditions worsen, traders are also taking a contrarian approach! Founder of DataDash, Nicholas Merten shared a concern macro view. He stated:

For the first time in 14 years, the Nasdaq Composite had a weekly close below its 200-week moving average. This was a pivotal moment for the two previous 50-80% bear markets in 2000 and 2008 #bitcoin never lived through anything like this so expect a lot more pain

Bhushan is a FinTech enthusiast and has a keen flair for understanding the financial markets. His interest in economics and finance draws attention to the emerging markets of blockchain technology and cryptocurrency. He is continuously in a learning process and stays motivated by sharing his acquired knowledge. In his spare time, he reads thriller novels and sometimes explores his culinary skills.

The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.