The price of Bitcoin (BTC) has experienced a correction after reaching an all-time high of over $126,000 just two weeks ago, sitting at around $109,000 at the time of writing.
Derivatives market data suggests that this correction phase may be nearing an end, but the general sentiment among Bitcoin and crypto traders appears otherwise, leaving them in what one analyst calls a “stage of distrust.”
Analysis published on the CryptoQuant platform by a trader who calls himself “darkfost” suggests the following: There are signs of skepticism in the market. “Once a correction ends and a new trend begins to form, markets often enter what is called a stage of distrust,” the analyst said. He added that it’s a “moment where investors are reeling from the previous decline and can’t believe the trend can really turn bullish again.”
This behavior is especially noticeable for loan interest rates (funding rate) futures market. According to the report, Although the rate remains negative on the Binance exchange, “This is a clear sign that short positions continue to lead.” This situation stems from the massive liquidation event that occurred on October 10th, which was reported by CriptoNoticias and affected operator confidence, he noted.
However, analysts think: This panorama may have the opposite effect than expected. “Paradoxically, the longer this distrust persists, the more likely we are to see an explosive bullish move,” he says.
When the uptrend becomes established, Accumulation of short positions can act as “powerful fuel for the next leg”.
As the price increases, these positions are liquidated and the following phenomena occur: short aperture. According to our analysis, in that scenario, the rally could quickly spread to a key liquidity zone around $113,000 and potentially into the $126,000 area.
(Tag translation) Analysis and research
