Key Points
- Bitcoin discussions on social media have surged amidst Ethereum ETF approval anticipation.
- John Bollinger, creator of Bollinger Bands, expresses caution about Bitcoin’s immediate future.
Santiment, a well-known analytics platform, recently noted a rise in Bitcoin discussions on social media. This increase in chatter is primarily due to the expected approval of the spot Ethereum exchange-traded fund (ETF).
The market is currently witnessing a surge in buy calls over sell calls, suggesting a growing optimism regarding Bitcoin’s price trajectory.
Buy Calls and Market Sentiment
When there is an increase in buy calls for an asset among traders on social media, it is often a sign of positive sentiment for continued price growth. Traders tend to view this as an opportune entry point, considering current prices as low and expecting an upward trend.
However, despite the positive social sentiment, new investors who may not have a strong belief in Bitcoin’s long-term potential often use the surge in buy calls as a chance to profit. This can lead to potential temporary sell-offs, as explained by Santiment.
Market Value to Realised Value Ratio
Currently, Bitcoin’s Market Value to Realised Value (MVRV) ratio is at 153.19%. The MVRV ratio measures the relationship between Bitcoin’s current market price and the average price at which each token was acquired. A high MVRV ratio suggests that Bitcoin is overvalued, and many holders are in profit. This scenario often results in increased selling pressure as investors look to capitalize on their gains.
According to Coinglass data, Bitcoin’s funding rate across crypto exchanges has reached 0.018%, the highest level in a month. A rallying futures funding rate is generally bullish, indicating strong demand for long positions. However, an unsustainably high level can lead to forced selling by leveraged long positions, triggering potential corrections.
John Bollinger’s Concerns
John Bollinger, the creator of the widely used analysis indicator Bollinger Bands, has also expressed caution regarding Bitcoin’s immediate future. Bollinger Bands plots standard deviations above and below a simple moving average and identifies volatility and potential price reversals. Recently, Bollinger noted a two-bar reversal at the upper Bollinger Band, a pattern often indicative of a temporary market correction.
While Bollinger’s analysis suggests short-term concerns, he remains optimistic about Bitcoin’s long-term prospects. Bollinger Bands analysis comes at a critical time for Bitcoin, which surged by 12% in the last seven days and is currently trading only 6% below its peak price.
Prominent crypto analyst Rekt Capital stated that if a weekly candle closes above $71,500, it can kickstart the breakout from the Re-Accumulation Range. However, he also noted that historical trends suggest Bitcoin might consolidate within this Re-Accumulation Range for several more weeks. The anticipation of the spot Ethereum ETF approval and the social media buzz bind investors to watch if Bitcoin can surpass its previous ATH.
