Save for the rejection at $9,500, Bitcoin has held up rather well on a macro scale over the past few days. As of the time of this article’s writing, the leading cryptocurrency sits at $9,200, holding the support in the $8,500-9,000 region.
Unfortunately for bulls, BTC is purportedly forming a signal last seen before the asset plunged 60% in March.
This adds to the growing similarities between the market top earlier this year and the price action now.
Bitcoin Forms Another Similarity to the February Highs
Bitcoin has made a strong recovery since the capitulation lows of $3,700 established during March’s global liquidity crisis. Even after a healthy retracement from the local highs, the asset remains around 150% above its year-to-date lows.
An analyst is starting to believe that another drop is likely, recently sharing the chart below.
It shows an unnamed technical indicator (seemingly two moving averages) poised to undergo a bearish crossover. The short-term moving average is about to fall below the long-term one, suggesting a loss in bullish momentum.
“After seeing $BTC mimick $SPX so closely for weeks now, I’m keeping things simple. Decision time soon with these moving averages. Bearish cross = decay IMO. Bulls have the opportunity for continuation as long as yellow stays north of pink,” the trader who shared the chart below explained.
This potential crossover is important as it was last seen as Bitcoin crashed from the $9,000s and $8,000s to $3,700 in a few days.
As aforementioned, the potential crossover isn’t the only thing that analysts have noticed is similar between the February highs/March crash and now.
The trader that predicted XRP would hit $0.13 in 2020 months before it did shared the chart below two weeks ago. It shows structural similarities between then and now.
There’s a separate analysis by another trader that led him to a similar conclusion.
Futures Data Tells A Different Story
Despite all these similarities, there remains one key difference: futures data.
One crypto technician recently shared the chart below, commenting:
“Here’s why I’m being a stubborn bull. At the peak of the last rally in February, there were a lot of very clear signs that the market was overleveraged and overbought. But at the moment we don’t really have that.”
The chart shows that the funding rate of Bitcoin futures markets are negative while they were well into the green last high.
There is notably a trader that thinks using futures data here may be a poor decision. He recently wrote in an analysis:
“It is possible that since this Bitcoin structure was very spot driven, that we can all be right at the same time in thinking this breaks down. The spot drive was from the same retail Robinhood types that were indiscriminately buying risk assets across the board.”
He’s saying that if spot-based retail traders are driving the ongoing price action in the Bitcoin market, futures data has little relevance.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com A Technical Cross That Sent Bitcoin 60% Lower Is Close to Forming