Crypto analyst Ardi pointed to the bear market divergence to explain what’s going on Bitcoin price for some time now. His analysis comes as BTC continues to struggle to stay above $70,000 amid the US-Iran war and rising oil prices.
Analyst explains what’s happening with Bitcoin amid price fight
In Post XArdi noted that for the first time in the bear market, Bitcoin’s price and the number of open positions differ over an intermediate time horizon. BTC has climbed to a low of around $60,000 over the past six weeks his open interest decreased over the same period. He said this meant the recent rally was not due to novel buyers entering the stock, but rather that it was largely a result of shorts closing out their positions.
The analyst further noted that investors who shorted the trade Bitcoin peak like saw it drop to $60,000 and thought it was a good position to take profits. “They locked in the profit. They exited. The pressure to exit caused the price to rise,” he said. Ardi added, however, that this development does not equate to fresh demand that will be enough to reverse the trend.
He said open interest usually increases when Bitcoin’s rally has real strength, when shorts close and longs open to replace them. Meanwhile, novel capital enters, creating a foundation bullish reversal in BTC. Ardi stated that no such thing occurred in this regard and that trading activity was one-sided even as the leading cryptocurrency surged as high as $75,000 last week.
Ardi said the problem is that the miniature position has a ceiling and once the last miniature position is closed, the source of the upside pressure disappears, leaving no other factor to sustain the upward move.
What might this look like for BTC in the near future?
Cryptocurrency analyst – Colin noticed that Bitcoin has been tracking a bear flag channel since the February 6 low. Therefore, he expressed this opinion BTC will eventually crash and that it is not a matter of if, but when. The analyst also questioned how high the leading cryptocurrency would rise before it crashed.
Colin opined that the highest price Bitcoin could reach before the predicted crash would be around $80,000. He described this as the best-case scenario at this point and that BTC may not even reach this psychological level. However, the analyst also admitted that there are some outliers, such as BTC rising above $80,000 if US-Iran war suddenly ends.
At the time of writing, Bitcoin is trading at around $70,700, having risen over the past 24 hours, according to data from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
