Bitcoin may have rejected a move above $12k multiple times during last few months, an anonymous Bitcoin trader believes a bull run is right along the next corner and it will be massive. A majority of the Bitcoin traders believe that such a bull run will occur in the future but they disagree when it will actually happen.
The anonymous trader and signaller Byzantine General has pointed out more than 23 trading indicators that predict such a movement in the future. Overall, these four factors point to 4 basic deductions:
1. The Bitcoin market is not overheated
According to the anonymous trader, the Bitcoin market is showing bullish signals because of it is not overheated anymore. He especially singled out the MPL indicator that measures this effect of the market. According to him, the MPL indicator shows an impending bull run especially with the small dips that occurred earlier this year.
Now in this crucial hour, Bitcoin is around the neutral mark and that is good because if the price index were supposedly moving down, we would have had a dip in the MPL but thats not the case.
2. Big Bitcoin futures moves keep being cancelled out
The Bitcoin futures market is being run by negative funding rates. These funding rates have been put in place to avoid too much volatility for the futures market. Under this funding regime, in a bullish market, the investors have to compensate short sellers and so on. If the funding rate is negative, it means that the bull run is still on the cards, no matter where the price is moving.
This past weeks despite the price moving below $10,300 for a bit, the funding rates have remained neutral or negative. This showed that the price pullback didn’t deter the bullish outlook of the crypto too much. The defence of $10,000 means that this bullish outlook has remained there. Byzantine General identifies as a swing trader rather than a day trader and for such traders, the long-term price swings matter. He tweeted:
First of all, there is funding. One of the best indicators to gauge market sentiment. After the drop from 12k it has been consistently negative or baseline at best….”
3. Less leveraged trades
With the recent price rejections at $12k which occurred during the previous months, Bitcoin futures market is witnessing a declining open interest. Open Interest is a futures market terminology that basically means a sum of long-term and short-term futures contracts. If the open interest is declining, it means that the short-term future is bleak, however, combined with other indicators, it means that the medium-term case for Bitcoin is still positive overall.
4.Strong fundamental data
Bitcoin’s hash rate is increasing overall and such that the miners are currently mining at a loss. Most of these miners aren’t likely to sell their Bitcoin unless a particular price index has been achieved. This creates a short-term buy pressure on the cryptocurrency as not enough coins are entering the market, but as soon as the target price is reached, miners sell their coins off, thus causing a selling pressure. However, if the bullish sentiment is strong enough, it can overcome it. Byzantine General tweeted:
Let’s take a look at some fundamentals. Hash ribbons recently gave 2 consecutive buy signals. These signals happen during the first recovery after miner capitulation. The bitcoin production cost is currently green. Simply put, this means that miners are potentially taking losses. Maybe it’s not very intuitive, but historically speaking these are amazing buy opportunities.”
It remains to be seen whether the bullish intent is strong enough as he predicts that can sustain the selling pressure of miners in the medium term.
Image source: Marco Verch under Creative Commons License.