Bitcoin is now challenging $120,000 after massive BTC volatility, and after strong altcoin performance. Ethereum, the market leader, has led the broader cryptocurrency market in an impressive upward trend since April. It has gained over 230%, and has attracted strong institutional interest.
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In the derivatives industry, sentiment is changing. CryptoQuant’s data indicates that, in August 2018, the Bitcoin Futures Power indicator dropped below zero, ending the positive readings associated with BTC’s recent rally. Axel Adler is a top analyst and believes that this index measures the combined impact of open interestThe cooling trend in the futures markets is reflected by funding rates and imbalances between taker orders.
The next move could be pivotal, as Bitcoin’s ability—or failure—to push through $120K will likely set the tone for the remainder of the quarter, especially as altcoins continue to show signs of strength and sector rotation intensifies.
Neutral Futures Index Raises Odds Of BTC Cooldown
Adler notes the recent shift in derivatives sentiment that has led to Bitcoin reaching its current high. Adler warns of the dangers that arise when Bitcoin Futures Power increases. index It has always coincided historically with market corrections when the neutral zone becomes negative. BTC is close to its record highs, so the current reading makes it more likely that a market correction will occur.
The market as a whole remains hot due to significant capital inflows, and increased trading activity. Some analysts, however, are starting to predict that Bitcoin may face a temporary cooling down as the momentum slows and derivatives markets signal caution. The spot price has been stable, but the lack of bullish data in futures is causing traders to watch for signs that demand may be waning.
At the same time, Ethereum’s explosive rally—up over 200% since April—has shifted market dynamics into a new phase where leadership is no longer solely dictated by Bitcoin. ETH’s fundamentals are strong, its exchange stock is reduced, and it has attracted institutional attention, which in turn, created a market with a balanced structure. Even if Bitcoin’s momentum stalls due to this diversification, altcoins with large market caps could keep the bullish spirit of the entire cryptomarket going.
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Analysis of Bitcoin price: approaching critical level
Bitcoin (BTC) has a 4-hour chart showing a price of $119,967. It is gaining 0.34% and approaching the important $120,000 level. BTC is now closer to its all-time record high of $123,217. This remains an important hurdle that bulls must clear.
Price action shows a strong recovery from early August lows near $114,000, with BTC now trading above its key moving averages — the 50 SMA ($117,269), 100 SMA ($116,893), and 200 SMA ($117,475). The alignment of the lines indicates that a short-term bullish structure is in place. Moving averages could act as dynamic support should a drop occur.
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Market is consolidating below the resistance level, which suggests a possible breakout attempt should buying momentum increase. The repeated rejections around $123K over the past few months have highlighted the significance of this area as a key supply zone.
If the price closes decisively above $123,217, momentum will likely be triggered and a new path to discovery of prices can begin. In the event that the price fails to move higher, it could retrace towards the $117K cluster of support, where the 100, 50 and 200 SMAs are converged.
Chart from TradingView, Featured Image from Dall E
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Source: www.newsbtc.com
