Ethereum (ETH) May Pull Back Over Next Two Weeks, BitMEX Data Hints

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Ethereum May Soon Consolidate

It isn’t a secret that the cryptocurrency market has been on a tear. Bitcoin (BTC), Ethereum (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 Ethereum traders. This is reportedly in the 93rd percentile of all Ethereum 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, Ethereum 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 writes, “leverage has gotten to the point where it looks like the market needs to consolidate.”

As of the time of writing, each Ethereum is valued at $250.93, and is down 3.5% in the past 24 hours. Bitcoin is at $8,100, even after the flash crash seen last week.

What’s After Consolidation?

So what comes after a brief consolidation period for the cryptocurrency market? According to an array of analysts, Bitcoin and its ilk may just see higher highs. As reported by Ethereum World News, prolific analyst Crypto Rand remarked that he sees a clear pattern playing out for Bitcoin. The pattern is for BTC 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 altcoins, like ETH and XRP.

The fact that Bitcoin just closed strong on its weekly chart corroborates this optimism. Popular analyst The Crypto Dog notes that BTC 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 cryptocurrencies 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 BTC decline from $6,000 to $3,000, recently remarked 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 Bitcoin 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
Bitcoin’s current rally makes no logical sense, pinning the irrationality of this market to institutional investors, futures, trading desks, high-frequency trading, 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 Ethan Hoover on Unsplash

The post Ethereum (ETH) May Pull Back Over Next Two Weeks, BitMEX Data Hints appeared first on Ethereum World News.

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