The price of Bitcoin rose 20% on January 12 from $30,500 to around $36,600 across major exchanges, but while the rebound after the correction has been strong, there are two warning signs.
First, the funding rate in the futures market remains high. Second, the U.S. dollar strength index is beginning to recover, which could be a bearish sign for Bitcoin and gold.
The positive outlook of the dollar poses a risk to Bitcoin’s momentum because alternative stores of value are priced against the dollar. Hence, if the dollar begins to rally, both gold and Bitcoin could see a potential pullback, particularly after a strong quarter.
The high funding rate of the Bitcoin futures market is also an issue in the short term. If the price of Bitcoin declines while the funding rate remains high, it could raise the probability of a correction.
CryptoQuant CEO Ki Young Ju says a second dumping could occur, noting that miners are selling with no stablecoin inflows. If stablecoin deposits to exchanges increase, it indicates an overall bullish market sentiment.
Founded in 2015, Coinchapter.com has become one of the leading resources for the crypto asset community. Created by a small group of cryptocurrency enthusiasts, Coinchapter.com was built to provide new members of the crypto asset community with unbiased listings of cryptocurrency exchanges and retail options that would allow them to buy the crypto assets that they wanted, how they wanted and at the price they wanted.