BITCOIN

When Bitcoin broke $ 57k, Quant explains why it could see a pullback here


Since Bitcoin has exceeded $ 57k, using Quantum On-Chain Analysis explains why cryptocurrency can see tensions here.

Bitcoin funding rate and futures open interest show show rising value

As explained by an analyst in a CryptoQuant post, some BTC indicators show values ​​that historically indicate that a correction is coming soon.

The first metric of relevance is the bitcoin funding rate, which is defined as a periodic payment to futures contract traders. Positive values ​​mean that most traders are bullish and long traders are paying these fees to short traders.

Although negative values ​​mean just the opposite; Traders are weak on Bitcoin and short traders have to pay long traders.

Another indicator is Future Open Interest. This metric shows the total number of futures contracts opened at the end of the trading day.

Here is a chart showing the trends of both these indicators for Bitcoin:

The funding rate and futures open interest vs the BTC price | Source: CryptoQuant

As the graph above shows, both indicators have recently noticed an increase in their values. Quant has identified instances where similar values ​​have been observed in earlier charts.

It seems that when such a trend has been observed in these metrics before, a correction has been followed.

Related Reading | Bitcoin Equity Accepts Trillion Dollar Market Cap on ETF Approval-Crypto Weekly Roundup, October 11, 2021

Also, it seems that both long-term holders and short-term holders are benefiting at the moment, as the chart below highlights:

Bitcoin long term SOPR and short term SOPR

The long-term SOPR and the short-term SOPR | Source: CryptoQuant

Having both long-term and short-term investors in such profits means that they are more likely to make some profit at this stage.

Related Reading | On-chain data shows Bitcoin miners have stopped selling despite a BTC rally above $ 57k

This reality, coupled with rising funds rates and open interest rates in the future, makes Quant believe that BTC will soon see a withdrawal in the short term.

BTC price

At the time of writing, the price of Bitcoin has risen 14% in the last seven days, close to $ 56.9k. In the last thirty days, crypto has gained 24% value.

Here is a chart showing the price trend of BTC in the last five days:

Bitcoin price list

Bitcoin's price shows a strong move up as the coin breaks $57k | Source: BTCUSD on TradingView

BTC has continued its climb over the past few days as the currency has now risen above $ 57k. Whether crypto can hold this momentum is unclear at the moment, but if the fund rate and open interest in futures are anything to go by, the market could soon move towards a correction. However, long-term indicators are still bullish.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com



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