Bitcoin (BTC) faces possible resistance as its price fall entered its third day despite initial recovery efforts. Bulls continue to protect high lines for the market leaning on spot ETF inflows and the upcoming halving. However bearish traders say the price will not rally as anticipated based on macro and industry factors.
A new analysis from crypto firm CryptoQuant shows reasons why there remains a high chance for the price decline of the market leader amid positive sparks. According to the report, the quick recovery anticipated in the market might be stunted by funding rates and correction levels.
Funding Rates Could Affect Bitcoin’s Price
Bitcoin funding rates are high close to 2021 bull figures which might spark a reversal. Although positive funding rates spell a bullish momentum, extremely high figures can trigger price corrections in the market. Similarly, with Bitcoin soaring to a new all-time high last month, its price faces the greatest-ever resistance level.
At press time, Bitcoin trades at $63,300 after a price drop over the weekend heightened by significant liquidations. Before this point, the asset price saw slight corrections below its high of $70,000 and traded sideways.
“The price is in a defined channel with around 20% expansion/retraction, an ideal scenario for large players to set up large positions. The Bitcoin price has risen by more than 300% since the last time the market was discounted, and in all the brief 20% corrections along the way, there hasn’t been a premium period like now.”
Retail Flows Show Bearish Trend
Furthermore, the retail flows could show signs of resistance around the present price range. According to the data, the retail flows haven’t hit these levels in three years showing the presence of the market participants.
”Historically, when there are large Retail profit-taking moves, it means a potential top is in the making. After the rapid fall in prices over the last two days, there has been a significant outflow of realizations by these holders,” the note added.
The IRS tax deadline and other macroeconomic factors led to plunging prices in stocks and crypt assets with Bitcoin prices falling below $63,000.
Source:coingape.com
