Bitcoin (BTC), which could still fall below $30,000, is being called the end by prominent sources.
Mike McGlone, senior commodity strategist for Bloomberg Intelligence, tweeted on January 25 that Bitcoin’s position was relative to its 20 week moving average. He noted that historically, the current levels have been a turning point.
McGlone: Bitcoin “a little extended” at all time highs
McGlone’s data still suggests that Bitcoin will weather a macro storm in the coming year.
These incidences are related to the coronavirus-cross-march crash, and the China miner’s rout.
He said that Bitcoin was an emerging asset with less than $1 trillion in market cap, compared to about $100 trillion of global equity, which may give it an advantage.
“Our graphic shows a bottoming indicator of Bitcoin, about 30% below its 20 week average.”
Bitcoin 20-week moving mean ratio vs. Bitcoin/USD chart. Source: Mike McGlone/Twitter
Cointelegraph reported recently that Bitcoin is echoing the March 2020 events and continuing onwards in many more ways than one month.
Nervousness about negative funding rates
However, there are other sources that warn against premature calling of spot price losses.
Related: “Stop panicselling” — Bitcoin whales save BTC when exchange balances drop
Material Scientist, a popular Twitter analyst and creator of the analytics platform Material Indicators, was one of them.
He took aim at the funding rates this week. These, while negative, don’t necessarily mean that Bitcoin can be used to deceive bears by offering an upward squeeze.
He stated, “I keep hearing people argue about negative financing necessitating our bottoming.”
“Half the CT used this logic to argue that 40k was at the bottom. It wasn’t. This chart shows the number of negative funding pairs in time. It also includes the BTC chart at top.
The accompanying chart highlighted instances where negative funding of crypto came before any further downside in 2021.
Bitcoin negative funding rate count vs. BTC/USD chart. Source: Material Scientist/Twitter
“No one knows when BTC will hit its bottom.” Sometimes, it’s as easy as assessing the asymmetry between potential downside/upside.” William Clemente, fellow analyst and trader, added a new update to the day. He recommended that investors use dollar-cost averaging in order to enter the market within the current range.
“As I stated yesterday, don’t believe asymmetry is to the downside with BTC low 30s. Potential downside 20Ks, upside 60k+. DCAing at these levels is smart IMO.”
BTC/USD traded around $37,000 as of this writing after retaining gains since the beginning of the week.