Over the past few days, Bitcoin has been stalling around the high-$10,000s. This still happened despite the surge earlier this week. As of the moment, the coin trades at $10,850. Moreover, a few percent was shy of the local high. Analysts are saying Bitcoin is primed to go higher.
Furthermore, investors will be favoring longs right now, as what the analysts are saying. Here are the reasons why they think so.
This Is Why Bitcoin Is Primed to Move Higher
One certain cryptocurrency trader put forth a chart. He explained that he believes sellers or short position holders might be “trapped” as of the moment. Furthermore, he said that a situation where Bitcoin spikes higher may occur because of this. As a result, it may thereby liquidate or stop these sellers.
He shared the chart below, noting the following to discuss why he believes this is the case for Bitcoin:
Not the Only Sign Suggesting Upside Is Imminent
The current state of Bitcoin futures funding rates is corroborating the anticipations of upside. The fee that long positions pay short positions is the funding rate of a crypto derivative. This is to make sure that the price of the derivative trades in line with the price of the index. Furthermore, it derives its price from spot markets.
A crypto derivatives tracker, ByBt, said that the funding rates of leading Bitcoin futures markets are negative all over the board. This is the case with ByBit, OKEx, Binance, and Huobi.
On the other hand, this may mean to investors that Bitcoin’s prevailing trend is bearish. However, before the trend reverts higher, negative funding rates are often seen.
To some, negative funding rates may mean that sellers are too aggressive. This means a reversion is likely to happen.