Bitcoin Hints Bullish, But Why It’s Far From Fresh Rally

Reynaldo Marquez

Last Updated: June 11, 2024 2:09 pm

3 mins read

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Bitcoin continues with its crab-like price action as it moves around $45,000, and $50,000. As of press time, BTC’s price trades at $46,854 with 4.2% losses in the last day.

Related Reading | TA: Bitcoin Fails Again, Can Bulls Save The Day?

Bitcoin BTC BTCUSD — BTC is on a downtrend in the 4-hour chart. Source: BTCUSD Tradingview

Operators seem to expect more profits in the short term as Bitcoin has historically seen gains at the end of every year. However, BTC’s price could remain rangebound for at least early 2022.

After December 3^rd crash into the lows at current levels, Bitcoin has struggled to maintain stability and has seen an increase in volatility. This could be the result of the violent move to the downside.

In the coming weeks, data from Jarvis Labs suggest BTC’s price could regain some stability. The firm shared some indicators and their predictions for what could be in play as the year wraps up.

According to Jarvis Labs Wealth Multiplier, a metric used to measure the period when buyers choose to cash in their funds at a loss or profit has been recording higher lows as it diverges with BTC’s price suggesting appreciation. This dynamic could be pointing at less volatility for Bitcoin.

This matches with Jarvis Labs’ Price versus Circulation Ratio indicators which suggest the BTC has been very active in the past months. Standing at around 0.3, this metric needs to bottom at around 0.2 if the bulls want to reclaim momentum, as at the beginning of 2021.

At that time, the Price versus Circulation Ratio was also coming in from a high above 0.3 in Q4, 2020, and made a sharp drop as the end of the year approached. This led to a massive rally in the subsequent months.

The firm also records an increase in its accumulation pattern indicators suggesting retail investors have been buying the dip in the past 7 days. This metric also suggests large investors have been more active at current levels.

More Blood Before Further Gains For Bitcoin?

Moving on to the derivative sector, Open Interest across the board was smashed during the last crash. Jarvis Labs records a significant drop in their OI/Market Cap ratio for Bitcoin suggesting a reduction in leverage positions.

In past months, the market was over-leverage and susceptible to liquidation cascades, when BTC’s price moved quickly to either direction. This is always an obstacle for bullish momentum continuation as Bitcoin is less free to climb into uncharted territory. Jarvis Labs said:

If this (Open Interest/Market Cap) starts rising while the price consolidates, that will likely be bullish due to a short squeeze possibility.

As NewsBTC reported, this scenario seems like the most plausible given current market conditions and low resistance at upper levels until $53,000. At this price, as Jarvis Labs claimed, a lot of short-term holders realized profits and it must be flipped into support for a convincing bounce.

Jarvis Labs still believes funding rates across exchanges, especially on Binance, must turn negative before a fresh rally get enough fuel. Thus, why Bitcoin could still see some downside in the short term and a red Christmas. The firm added:

BTC sits below Short-term holder price (53k) and that level needs to be recovered soon. Chop market for now. Potential route for BTC is 49k ->42(44k) ->54k.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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