bitcoin may be falling to spot rates. Still, one analyst is unfazed and expects the coin to reverse recent losses and recover strongly before peaking in December 2024. At spot rates, btc is down about 11% from 2024 peaks. and is struggling to generate enough buying pressure, watching the formation on the daily chart.
Will history support bitcoin and reach new highs?
Taking x, the analyst twitter.com/CryptoCon_/status/1775909689173115224″ target=”_blank” rel=”nofollow”>reflexes historical price patterns using the 2-week Fisher Transform indicator, a tool for selecting possible reversal zones such as double tops or bottoms. Although the technical indicator is lagging, it has accurately detected spikes in the past.
In 2021, when bitcoin soared above $69,000, the Fisher Transfer indicator printed a signal, highlighting potential spikes. In the following weeks, after this signal, prices plummeted.
By the end of 2022, bitcoin had fallen as low as $16,000, accelerated by the collapse of FTX and the bankruptcy of several other popular crypto hedge funds, including Three Arrow Capital (3AC).
The analyst also emphasizes the importance of the indicator to differentiate between a double top, reflecting that of 2017 and 2021, and a possible single peak at the end of this year.
Currently, the trader said prices are approaching 2017 levels. Prices then created what the analyst described as a “more subtle initial rise” before peaking six months later above $20,000.
If this progresses and the indicator “pauses” where it is, bitcoin will likely record a “single top.” However, only time will tell where this cap will be.
Were hedge funds selling off at highs?
This prediction comes amid important bearish bets by leveraged hedge funds. Data from the United States Commodity Futures Trading Commission (CFTC) reveals that these funds held record “short” positions in bitcoin futures contracts last week.
Observers note that this was the largest short position since 2017, with more than 16,000 contracts. By selling short, they expected prices to fall, which is precisely what is happening with spot rates.
However, even when hedge funds were short, another analyst, responding to the trend, said the futures premium remained high. This is a development that some of these crypto hedge funds are taking advantage of.
The number of short positions could increase in the coming days as US Federal Reserve officials appeared to take a hawkish stance and upbeat economic data began to arrive. Being a data-driven central bank, the Federal Reserve may not cut rates as quickly as initially projected.
Featured image of DALLE, TradingView chart
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
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