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Bitcoin Attempts Price Breakout; Analysts See Limited Upside
Crypto funds are deploying newly subscribed capital, which seems to be pushing the cryptocurrency higher, one observer said.
Updated Mar 6, 2023, 3:14 p.m. Published Jun 3, 2021, 9:12 a.m.
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Bitcoin (BTC) is looking higher, having ping-ponged over a narrowing price range for the past few days. But despite signs of a breakout, some analysts remain cautious.
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- Bitcoin has risen 8% this week to trade above $38,500, according to CoinDesk 20 data.
- Crypto funds are deploying newly subscribed capital, which seems to be pushing the cryptocurrency higher, according to Stack Funds' co-founder and COO Matthew Dibb.
- Limited Partners "are buying the dip, and the new start date for capital deployment/allocation is generally the first day of month," Dibb told CoinDesk.
- The rally appears to be a low-leverage, spot-driven move. Funding rates – the cost of holding long positions in the perpetual futures – remain close to zero, according to data provider Glassnode. A high funding rate is taken to represent excess leverage on the bullish side.
- The daily chart shows the cryptocurrency has broken out of its two-week-long symmetrical triangle (congestion) pattern and further gains may be in the offing.
- "Bitcoin is looking much better technically," Dibb said. "However, we would need to see a weekly close above the previous short-term high of $40,904 to regain confidence of a resumed uptrend." The weekly close is Sunday at UTC 23:59.
- Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, expects recovery rallies to be short-lived.
- "We expect selling to resume and large supply being offered above $45,000," Balani said.
See also: Market Wrap: Bitcoin in Repair Mode as Traders Head to Miami; Dogecoin Gains
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