Bitcoin broke back above the $60,000 levels and records moderate profits in the past day. The benchmark crypto trades at $61,483, at the time of writing, with 4% profits in the daily chart and a 7% loss in the weekly.
BTC with moderate profits in the daily chart. Source: BTCUSD Tradingview
Bitcoin has slowed down from its rally after it was rejected at the high of its current levels. As NewsBTC has been recording since BTC’s price started turning to the upside, the rally has been driven by institutions increasing their bet on the cryptocurrency as its ETF was rollout in the U.S.
Related Reading | Bitcoin Exchange Balances Decline To Three-Year Low Amid Rising Prices
The upward trend brought a lot of leverage to the Bitcoin-based derivatives as speculators and short-term investors tried to ride the new bullish momentum. However, more leverage implies more volatility, and it can turn an upward trend fragile and susceptible to sudden moves.
In that sense, as Bitcoin scored a new all-time high above $67,000, long-term holders started taking profits. This brought BTC’s price back to the high at $50,000 and a display of low volatility with mostly sideways movement in recent days.
Bitcoin’s move to the downside has left market sentiment intact, as QCP Capital Capital claimed in a recent analysis. The firm believes BTC’s price is “taking a breather” after a run towards uncharted territory.
The general sentiment in the market remains bullish despite the recent dip and retest of critical support at $58,000. QCP Capital claimed:
Despite this quick dip from the highs, the market feels relatively calm and perhaps even slightly optimistic that this is just a dip before a larger rally into year-end.
This can be better visualized on the Bitcoin Options market, frequently used by investors to front-run or hedge against the potential future downside. As seen in the chart below, and as explained by QCP Capital, the market remains optimistic with “risk reversals still skewed to the call side”.
Source: Skew via Twitter
Related Reading | Why Bitcoin Could Correct Lower Below $60K In Near-Term
Bitcoin Could Rise As Altcoin Bleed
QCP Capital expected Bitcoin to react with short-term bearish price action and sideways movement, but now they are reducing their BTC shorts with the potential to turn neutral on the asset.
Related Reading | Bitcoin Dives Below $60K, Why Bulls Could Struggle In Short-Term
The firm added that funding in perpetual futures contracts is flat. The cool-off has spread to other sectors in the market, the firm said:
October forwards were trading at over 30% annualized and are about to settle. November futures were trading around 25% and have come down below 15%.
However, this could be bad news for altcoins as Bitcoin could resume its rise in market dominance. Thus, many could underperform while BTC’s price re-enters price discovery.