Bitcoin has begun showing some signs of topping out as the crypto inches lower from its previous consolidation region around $8,800. BTC’s move towards $8,600 has led some analysts to believe that its recent highs of $8,900 will mark a mid-term top.
One valuable indicator that often offers significant insight into future trends is now suggesting that the crypto is close to tumbling lower and retracing its recent gains, although it may still have a little room to run before this occurs.
Bitcoin Inches Lower as Bulls Lose Their Strength
At the time of writing, Bitcoin is trading down just over 1% at its current price of $8,670, which marks a notable decline from its recent highs of $8,900 that were set at the top of the recent rally.
It is important to note that the cryptocurrency’s inability to sustain within the upper-$8,000 region seems to suggest that bulls are losing strength, and unless it finds major support within the lower-to-mid $8,000 region, this recent uptrend could simply mark another lower high that results in a sharp retrace.
It is imperative to note that the rejection at $8,900 also marks a rejection at the cryptocurrency’s upper-boundary, suggesting that it may soon visit its mid-range support at $8,200, and subsequently its range lows at roughly $7,200.
TraderXO, a prominent cryptocurrency analyst on Twitter, spoke about this range and the key levels he is watching in a recent tweet, explaining that its first “trouble area” exists at $8,500.
“BTC – Various charts: All about the mid ranges. Short from 87’s – Targeting 82’s – first trouble area at 85’s. As mentioned earlier – looks like distribution will playout… so far is the case,” he noted, pointing to the collection of charts seen below.
$BTC – Various charts
All about the mid ranges
Short from 87's – Targeting 82's – first trouble area at 85's
As mentioned earlier – looks like distribution will playout… so far is the case… pic.twitter.com/DEAh2JOOif
BTC’s Funding Rate May Also Spell Trouble for Where It Goes Next
Bitcoin’s funding rate on margin trading platforms like Bitmex can also provide valuable insight into where the crypto is heading next.
Currently, this indicator suggests that BTC may see some slightly further upside before it begins another journey lower.
“BTC – The correlation between funding rate on leveraged exchanges and #bitcoin price is apparent… when the rate goes positive the price tops out, when funding goes negative the price stabilizes and then pumps… still room for the rate to go historically a little higher,” popular trader Big Chonis explained in a tweet from earlier today.
$BTC – The corrilation between funding rate on leveraged exchanges and #bitcoin price is apparent… when the rate goes positive the price tops out, when funding goes negative the price stabilizes and then pumps… still room for the rate to go historically a little higher pic.twitter.com/dxf7lCQHJd
Although BTC could see a small bounce around its current price levels, it does appear that the recent 2020 rally is losing steam, and that further losses are inbound.
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