On-chain Bitcoin metrics suggest that the price correction might play in bitcoin’s favor as whale accumulation has seen a significant surge over the past couple of days. Bitcoin price correction of 13% yesterday took it to below $30,000 level for the first time in 3 months, raising speculation about a long due market correction.
?? #Bitcoin $BTC Number of Addresses Holding 1k+ coins just reached an ATH of 2,425
Previous ATH of 2,424 was observed earlier today
View metric:https://t.co/cjV0krRVgK pic.twitter.com/WBiQqXtcSH
— glassnode alerts (@glassnodealerts) January 16, 2021
Why This Might be Best Entry Point for Bitcoin Bulls?
Blockchain data analytics firm Santiment shared that the ratio between the BITMEX long shorts has neutralized after several days of longs dominating over shorts. This is good news for whales as it has reduced the growing premium on exchanges created due to excessive buying pressure.
If bulls were to take Bitcoin long positions this is an opportunity they will not miss as they no long have to pay for shorts.
?? With #Bitcoin and #Ethereum retracing, the ratio between #Bitmex longs and shorts have neutralized after several days of overwhelmingly high long levels. With this, longs are no longer paying shorts, and those willing to leverage long into this dip no longer
(Cont'd) ?? pic.twitter.com/WjnFQtf6iR
— Santiment (@santimentfeed) January 22, 2021
Funding Rates on Exchanges Turns Negative
Apart from the lowering premium rates and growing whale addresses in the wake of yesterday’s crash, the funding rates on exchanges have finally gone negative suggesting a building bullish sentiment.
if funding is positive, longs are paying shorts. if it is very high (>.1%) it means the market is disproportionately long and there is a lot of incentive to be short, so generally, you’d expect a correction of some sort. but none is given and the price could continue to go up a lot
Bitcoin’s current funding rate on BINANCE has gone down below 0.1% currently at 0.0471 levels. The last time when bitcoin funding rates registered such a cool-off price soared to new all-time-highs and the building bullish momentum could very well play in bitcoin bulls’ favor.
The top cryptocurrency is currently trying to build strong support at $30,000 to make a move upward. Throughout this bull, season bitcoin has managed to overcome most of the resistance up to $40,000 with ease before registering a couple of price corrections of up to 23%.
Price corrections and market pullback are part of a bull run where many believe that these market shakeups help in indicating weak hands who bought in because of the hype and wanted to make quick money. With most of the exchange premiums now gone, and liquidity of exchanges nearing dry, bitcoin bulls might take charge again after almost two weeks.
