Bitcoin (BTC) faces renewed doubts about the strength of its October 7th rally as analysts see a possible reversal of Wednesday’s short squeeze.
Funding rate in the red area
Data from Cointelegraph Markets Pro and TradingView tracked BTC / USD as it hovered around $ 54,000 after failing to gain support at the $ 55,000 mark.
The day before, Bitcoin suddenly rose to highs of USD 55,700, which was accompanied by massive buying pressure.
However, with funding rates turning positive on the stock exchanges, concerns on Thursday centered on what could end up being a lower protest movement.
The overly positive funding rate shows that the market expects further upside potential and that long-term BTC is an important asset. In such cases, a mass reduction of positions can accelerate and intensify a downward movement as it begins.
Sentiment among investors was reflected by sentiment data, with the Crypto Fear & Greed Index hitting 76/100 that day, demonstrating “extreme greed”.
“Investors are extremely greedy for BTC at the moment,” said the trader and analyst Rekt Capital warning.
Prepare to take profit
Although Bitcoin was temporarily below $ 10,000 from all-time highs, it also encounters significant resistance levels at $ 58,000, $ 60,000, and more on its way back to discovery.
Related: Price Spike: Are Whales Ahead of Bitcoin Futures ETF Approval?
As Cointelegraph reported, October is expected to close just below the high, while November could return to lower lows before December breaks current records.
However, longtime market participants have recommended exit strategies this week, including John Bollinger, creator of the popular trading indicator Bollinger Bands.
The second goal has been achieved. $ BTCUSD. UpperBB is expanding with a rally. Go to a station like BBstop or Chandelier. All right now, but start looking for signs of a climax / exit. I will be away for a couple of weeks. Good transaction! #Bitcoin
– John Bollinger (@bbands) October 5, 2021
Bollinger Bands track the asset’s up and down movements and are currently indicative of calmer conditions. However, as the ranges tighten, volatility follows.
Altcoins, on the other hand, are unlikely to see a certain cyclical return until next year.