Champagne but where’s the Cigar?

3Сommas Blog
4 min readFeb 12, 2020

A memorable weekend, champagne corks flying all over the social media, and louder than ever “I told you so” declarations from the Bull’s camp. The bitcoin price, which was trading under $7,000 just two months ago, has rapidly climbed to over $10,000 this weekend with many expecting bitcoin, as well as the altcoin market, at large, to continue to post record gains. Now let’s take a look at a few bullish and bearish scenarios that could unfold in the next few days.

Some analysts are quick to point out that the current Bull Run is different to the unprecedented 2017 Rally.

Bitcoin exchange deposits have dropped sharply over the last six months, suggesting the latest bitcoin rally isn’t being driven by retail investors like in 2017, Glassnode Crypto Analytics data revealed. Bitcoin exchange deposits have previously increased along with the bitcoin price, with deposits falling back during bear markets. However, deposits have continued to slide this year despite the uptick in the bitcoin price, leading many analysts to attribute the latest bull run to long-awaited institutional investors buying up bitcoin.

“This breakout is the real deal” said Willy Woo, partner at bitcoin and cryptocurrency hedge fund Adaptive Capital.

“Fundamental investment activity is backing this $10,000 breakout.”

Some are even more aggressive with their bullish projections: “Bitcoin just hit $10,000”.

Anthony Pompliano, the cofounder of bitcoin and crypto investment group Morgan Creek Digital, said via Twitter. “I still think that bitcoin will hit $100,000 by end of December 2021”.

If you missed this rally, extreme caution is required as a rapid 40% surge is often followed by a sudden drop or extreme short-term volatility. Some analysts point out that a retracement is imminent, despite the overwhelming bullish sentiment across all media.

In addition to the Rising Wedge pattern that typically indicates a Bearish setup, Dyme, a famous options trader, adds the Overleveraged Longs indicator pointing to a possible mild correction in the short-term. Alex Krüger, a prominent market analyst also found that the funding rate on Bitmex had lately reached 0.12 percent — this is a level that is typically followed by a drop in bitcoin prices.

“The boxplot shows what happens with bitcoin’s price when Bitmex funding reaches levels as extreme as today’s,” said Krüger. “Bitmex funding can be used as a proxy for traders’ positioning. The mean return after 5 days has been -7%.”

In general, the market sentiment remains extremely positive and hopefully we’ll see more “buy-on-dips” opportunities for those who watched the recent rally from the sidelines. Moreover, Bitcoin dominance broke down and this signifies that, in the short-term, the altcoin market will present excellent opportunities for profit:

This is also supported by $ETH/BTC chart according to @CryptoHornHairs

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