Bitcoin Fails To Convince Bottom Is In With $12K ‘Still Probable’

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

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

Bitcoin to see new “depression” before bull run resumes

Bitcoin divides opinion after its week of solid gains. Warnings of a possible relapse abound, while others feel sorry for the bears ahead of time.

“Now bears will be caught in the vicious cycle of praying for pullbacks to go lower, not realizing that the tides have shifted for a while and we are going higher,” said Chris Burniske, former head of crypto at ARK Invest, summarized.

However, even more optimistic views, such as Burniske’s, do not foresee the uptrend continuing unbroken into a definitive end to Bitcoin’s latest bear market.

Popular commentator Lemon, who uploaded the classic “Wall Street Cheat Sheet” chart over the weekend, predicted that BTC/USD would fall even further.

“Sorry, I have to stay true to my thoughts, I think we’re here,” he said told Twitter followers point to Bitcoin sentiment — and price — heading for macro lows.

“Wall Street Cheat Sheet” annotated chart. Source: Citroen/Twitter

Such a theory ties in with more dismissive reactions to the latest recovery in BTC price, such as that of fellow Crypto commentator Il Capo, who described it as “one of the biggest bull traps I’ve ever seen” in recent days. .

“Despite the recent uptick, the bearish scenario has not been debunked,” he said wrote in a follow-up to Twitter on January 14:

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

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

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

Funding rates scare the mood

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

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

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

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

With positive rates, those who desire BTC are actually paying to do so, indicating a popular belief that prices will continue to rise. This, in turn, can cause major upheaval if price reacts the opposite of consensus, triggering a cascade of liquidations as support breaks.

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

“In previous times when funding rates were as high as today, Bitcoin had a pullback.”

Annotated chart for Bitcoin funding rates. Source: CryptoQuant

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