Bitcoin is surging higher as legacy markets rally. The leading cryptocurrency is up around 5% in the past 24 hours, outpacing many altcoins, with focus re-centering on BTC.
The cryptocurrency seems to be benefiting from a drop in the value of the U.S. dollar. This has historically sent both gold and Bitcoin, along with the stock market, higher.
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There do seem to be some technical reasonings behind Bitcoin’s ongoing rally too, though. Namely, the cryptocurrency managed to close its weekly candle above the pivotal $10,000 support, which is a technical trend that analysts say gives BTC a chance at rallying.
At current, Bitcoin trades for $10,750, having moved above $10,800 just an hour or two ago. This is the highest the cryptocurrency has traded in over a week.
Analysts are optimistic that BTC continues to move higher as technicals and fundamentals continue to suggest more upside is in the works.
Chart from TradingView.com of BTC's price action over the past few days
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Funding Rates Corroborate Expectations of Further Bitcoin Upside
The funding rates of Bitcoin futures markets are negative despite the ongoing rally, boding well for more upside.
The funding rate is the fee that long positions pay short positions to ensure that the price of a derivative trades near/at the price of the spot market.
Negative funding rates suggest that shorts are currently heavily positioned.
While this may lead some to believe that Bitcoin is primed to move lower due to potential selling pressure, negative funding rates are often seen before the BTC price rallies. It appears that the market often goes against the majority; in this case, that would mean Bitcoin continues to move higher to shake out short position holders.
The technicals agree with the assessment that Bitcoin will soon move higher.
One analyst, referencing the chart below, noted that it would be unwise to sell after Bitcoin underwent the current pullback:
“Kick yourself if you were selling after a 20% pullback from the highs into the first test of one of the most significant support and resistance flips we have had in years. Context is everything,” he explained.
Image Courtesy of Cantering Clark. Chart via TradingView.
As the chart indicates, Bitcoin’s recent price action has actually shaped up to be more bullish than bearish. The cryptocurrency managed to cleanly bounce off the pivotal $10,000 horizontal, negating the bear case that some were expecting to play out.
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Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Bitcoin Surges Towards $10,800 as Recovery Continues: Here's What Comes Next