Bitcoin (BTC) faced renewed doubts about the strength of its bull run on October 7th as analysts envisaged a possible reversal of Wednesday’s short squeeze.
Funding rates in the red area
Data from Cointelegraph Markets Pro and TradingView tracked BTC / USD as it hovered around $ 54,000 after finding no support at the $ 55,000 level.
The day before, Bitcoin had seen an abrupt surge to highs of USD 55,700, which was accompanied by great buying pressure.
However, with funding rates turning positive on the exchanges, concerns on Thursday centered on what could end up being an opposing downward move.
Financing rates that are too positive indicate that the market expects further upside potential and that long BTC has significant value. In such circumstances, a mass dissolution of positions could accelerate and amplify a downward movement, should it begin.
Sentiment among investors was reflected in sentiment data, with the Crypto Fear & Greed Index hitting 76/100 that day, representing “extreme greed”.
“Investors are currently extremely greedy for BTC,” warned the trader and analyst Rekt Capital.
Prepare to take profit
While Bitcoin was below $ 10,000 from all-time highs at one point, it’s also encountering significant resistance levels at $ 58,000, $ 60,000, and more on its way back to pricing.
Related: Price Spike: Are Whales On the Front Line in Approving a Bitcoin Futures ETF?
As Cointelegraph reported, October is set to close just below highs, while November could see a return to lower levels before a December final wipes out current records.
Nonetheless, long-time market participants are already advising an exit strategy this week, including John Bollinger, creator of the popular trading indicator Bollinger Bands.
Second goal achieved, $ BTCUSD. UpperBB is expanding with the rally. Keep a trailing stop like BBstop or a chandelier going. All clear for now, but I’ll start looking for signs of a top / exit. I’m on the road for a couple of weeks. Good deal! #Bitcoin
– John Bollinger (@bbands) October 5, 2021
Bollinger Bands map the upward and downward volatility of an asset and currently indicate that quieter conditions should prevail. However, when the bands narrow, volatility follows.
Altcoins are not expected to deliver definitive cycle gains until next year.