Ethereum May Soon Consolidate
It isn’t a secret that the market has been on a tear. (), (ETH), and many other crypto assets are right under their year-to-date highs, and look poised to break into a decidedly bullish cycle.
However, an astute observer, who goes by “Rptr45” on Twitter, suggests that the market may consolidate. The statistician looks to the fact that the daily funding rate on BitMEX, which is the percentage that investors pay on certain trades, has reached 0.34% for traders. This is reportedly in the 93rd percentile of all funding rates ever.
While this sounds negligible, Rptr notes that such high funding rates have led to periods where the value of ETH goes “decidedly negative” in the following ten to 20 days. According to data he compiled, fell by -8.2% on average in the 20 days that followed a BitMEX funding rate of more than 0.336%. Thus, if history is of any indication, ETH could fall by 10% (or even more) from here, ending the jaw-dropping rallying it has been on over the past week or so. Or at Rptr , “leverage has gotten to the point where it looks like the market needs to consolidate.”
As of the time of writing, each is valued at $250.93, and is down 3.5% in the past 24 hours. is at , even after the flash crash seen last week.
What’s After Consolidation?
So what comes after a brief consolidation period for the market? According to an array of analysts, and its ilk may just see higher highs. As by World News, prolific analyst Crypto Rand remarked that he sees a clear pattern playing out for . The pattern is for to trade within a triangle, then break to the upside to potential touch the $10,000 price level. This would also lead to a similar rally in , like ETH and XRP.
The fact that just closed strong on its weekly chart corroborates this optimism. Popular analyst The Crypto Dog notes that closing at $8,100 is a “hell of a bullish” sign, looking to the fact that the volumes, which he calls “near record-breaking”, confirm that the ongoing foray higher is strong and valid. The recent close marks the 16th or 17th week in a row that weren’t subject to a massive sell-off, which were a rather common sight in the latter half of 2018.
Some, however, have been a bit more cynical. Magic Poop Cannon, an ill-titled technical analyst that called last year’s decline from $6,000 to $3,000, that there’s a likelihood that the bull market isn’t on yet. Per previous reports, the trader explained that there are clear signs that is overextended: the Money Flow Index and Network Value to Transactions ratio have both neared the top of their oscillators, which is a pattern that has historically preceded drops of over 80%. He adds that
’s current rally makes no logical sense, pinning the irrationality of this market to institutional investors, futures, desks, high-frequency , and other factors that have been known to manipulate the underlying nature of markets.
But who will be right? The bulls or the bears?
Title Image Courtesy of on
Published at Tue, 21 May 2019 00:09:23 +0000
