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Bitcoin’s price has surpassed $63,000 to set a new all-time record, but markets are divided in the short term.
On Binance on Tuesday, the price of Bitcoin (BTC) hit a new all-time high of $63,478.
Market sentiment against Bitcoin and Ether (ETH) is largely positive, but short-term sentiment is mixed.
When the price of a commodity sets a new all-time peak, analysts use the phrase “price discovery.”
On Tuesday, the price of Bitcoin reached price exploration, surpassing its previous high of $62,000.
When an asset reaches market exploration, one of two situations will occur: it becomes overbought and experiences an extreme reversal, or it experiences greater technical traction and continues to rally.
Though Bitcoin’s momentum is undeniably high, traders are divided about BTC’s near-term trajectory.
Scott Melker, a cryptocurrency derivatives trader, said that the four-hour price chart of BTC has started to enter into overbought territory.
“Hidden bullish divergence printed a couple of candles ago, signaling continuation and invalidating the bear div. 4-hour RSI has finally reached overbought, let’s see how deep it can push.”
On top of that, technical measures indicate that Bitcoin could be overbought in the short term, while the futures market remains highly crowded.
According to Bendik Norheim Schei, the head of research at Arcane Research, the three-month premium on BTC futures contracts has reached 50%.
Futures premiums show whether the options market is oversaturated with investors. If the premiums are high, the risk of a major sell-off as a result of profit-taking by buyers rises.
“This is insane. Annualized 3-month basis (premium on BTC futures contracts) approaching 50%. 50%.”
Final leg of the bull rally?
According to Mohit Sorout, the founding partner of Bitazu Capital, there is a chance that Bitcoin is in the final leg of its uptrend. He said:
“Truth be told I seriously think we’ve entered the final leg of this $btc bull market. To be clear, final leg could be 2-3 weeks or even more. Price could reach 200k or even more who knows. Just don’t make irrational life decisions based on unrealized PnL.”
However, there is a good chance that Bitcoin will not reach its all-time high like it did in 2017. Rather, like gold in its early days, it could range and consolidate for a long time after it peaks.