Bitcoin (BTC) could still fall under $30,000, but some prominent sources are already calling the end of the latest bearish turn on BTC/USD.
In a tweet on Jan. 25, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, eyed Bitcoin’s position relative to its 20-week moving average, noting that historically, current levels have marked a turning point.
McGlone: Bitcoin “a bit extended” at all-time highs
Still hopeful for Bitcoin to weather a macro storm this year, McGlone’s data places BTC/USD at the same position in which it halted downtrends in March 2020 and July 2021.
Those incidences correspond to the coronavirus cross-march crash and the China miner rout, respectively.
“The fact that Bitcoin is an up-and-coming asset, with less than $1 trillion market cap vs. about $100 trillion of global equities, that got a bit extended may give the crypto an advantage,” he commented.
“Our graphic depicts a bottoming indicator for Bitcoin — about 30% below its 20-week avg.”Bitcoin 20-week moving average ratio vs. BTC/USD chart. Source: Mike McGlone/Twitter
As Cointelegraph recently reported, Bitcoin has been echoing the events of March 2020 and onward in more ways than one this month.
Nervousness on negative funding rates
Nonetheless, other sources continued to call for caution when it comes to calling time on spot price losses.
Related: ‘Stop panic selling’ — Bitcoin whales bag spare BTC as exchange balances fall
Among them was popular Twitter analyst Material Scientist, creator of analytics platform Material Indicators.
This week, he took aim at funding rates, which, although negative, do not necessarily mean that Bitcoin will dupe bears with an upward squeeze.
“I keep seeing people argue about negative funding necessitating us bottoming,” he argued.
“Half of CT used that logic to argue 40k was the bottom. It wasn’t. This chart shows the count of negative funding pairs over time, alongside with the BTC chart at the top.”
An accompanying chart showed instances in which negative funding across crypto did indeed come before further downside in 2021.
Bitcoin negative funding rate count vs. BTC/USD chart. Source: Material Scientist/Twitter
“No one knows when the bottom is for BTC. Sometimes it’s as simple as assessing the asymmetry of potential downside/upside,” fellow trader and analyst William Clemente added in a fresh update on the day, recommending investors employ dollar-cost averaging (DCA) to enter the market in the current range.
“As I said yesterday, don’t think asymmetry is to downside with BTC in low 30s. Potential downside 20Ks, upside 60k+. DCAing into these levels is wise IMO.”
BTC/USD traded at around $37,000 at the time of writing, having held onto gains from the start of the week.