A recent downward correction in the Bitcoin market has done little to offset the long-term bullish bias, Robbie Liu points out.
OKEx’s investment analyst mention a wave of trade data readouts showing that the cryptocurrency has limited downside risks. He noted that last week’s “Musk rally” of more than $ 6,000 helped restore bullish sentiment, adding that closing above the peak of the run-up could prompt BTC / USD to challenge $ 40,000 – or even recover $ 42,000.
“The long / short ratio saw few ups and downs during the week, hovering between 1.07 and 1.53, and while prices continued to rise, the ratio did not return to last Friday’s high of 1.80,” said Mr. . Liu explains. that the ratio is now around 1.20.
In retrospect, the long / short ratio compares the total number of users opening long positions with users opening short positions. If the ratio is low, it indicates that more traders are in short positions i.e. betting in favor of a price drop.
Bitcoin long/short ratio. Source: OKEx
At 1.20, the long / short ratio is sufficiently bullish, indicating that Bitcoin could see further price increases in the coming sessions.
Bitcoin basic difference
More measurements point Bitcoin in a northerly direction. The quarterly futures premium, which measures the base difference between Bitcoin’s contract rates and spot prices, is currently 4.8 percent or $ 1,800. It indicates that the market is regaining confidence in an upward movement.
Bitcoin quarterly futures premium. Source: OKEx
“In addition,” added. Mr. Liu, “the funding rate perpetual swaps, following the same trend as the quarterly futures premium, continued to rise during the week. It peaked at 0.19% on Thursday morning before the price fell back for a short-term correction. “
“The current funding rate is around 0.06%, which is within the normal range and there is room for Bitcoin to continue its upward movement,” he added.
The week also saw Bitcoin’s open interest and volume rise in tandem to $ 2.1 billion after staying lower in the previous session. The jump came around the same time that Bitcoin confirmed a double bottom scenario at the $ 34,500 level.
“This price level will be an important support in the future,” added. Mr. Liu.