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Is Bitcoin nearing its peak? It’s unlikely. Many on-chain measurements revealed that, although Bitcoin was highly bullish, it had not reached its peak. While funding costs are strong, the market is not entirely dominated by derivatives. Since spot liquidity has been strong, the market has not yet reached the stage that the rally is entirely led by derivatives. The overcrowded long trade could also see a blast to $64,000, with some pullback before another wave to $68,000.
Bitcoin 1-day chart
BTC broke out of a declining channel over the weekend, climbing up to $61,000, and was valued at $59,750 at the time of publishing. Although not depicted on the map, an ascending triangle pattern was forming, with the base at $53,000 and a higher low at $55,900, although the resistance at $60,000 has remained for the past few days. In the next week or two, this could fall to $67,000-$68,000.
However, there would almost certainly be a liquidity chase to the downside until a breakout – and the financing cost will easily become exorbitant when everybody tries to long a breakout past ATH. As a result, if there is a fall, the $58,000 and $55,600 thresholds have good protection. A $53,000 demand zone has also been created.
The RSI was making higher lows, indicating that bullish momentum was fading. Despite the fact that the price has formed a higher peak, the OBV has been largely stable in recent days and has not yet risen above the highs seen in mid-February.
Trading activity has also been trending lower, indicating that consolidation was taking place.
The Chaikin Money Flow has been flowing in the neutral zone for nearly 10 days now, and was last seen on the regular map in May 2020, when Bitcoin stabilised about $9400.
Taking a long position on a break over $60,000-$61,000 could result in losses. Instead, a pullback to $58,000 or even $56,600 can be used to scale into long positions. Bitcoin dominance is also declining, and large-cap coins are doing well, indicating that money is moving from BTC to large-cap coins, defined as coins with a market cap of more than $2 billion.