CNBC Fast Money trader Brian Kelly sees three potential signs of a price hike when Bitcoin (BTC) reaches $ 19,000. Both fundamental and technical factors indicate that exit may be inevitable when height is excessively long.

Kelly mentioned three reasons why a short-term withdrawal of Bitcoin occurred. The reasons were an infusion of altcoins, high expensive addresses and high funding rates. On November 25, he told CNBC:

“I’m still a bitcoin bull. In the long run, I will be optimistic over the next decade. But if I take off the long-term investor hat and put on the short-term investor hat, there are some things I’m starting to see that point to a climax.
Altcoin pump shakes things up
Alternative cryptocurrencies or altcoins like XRP and Stellar (XLM) have risen in recent months, according to Cointelegraph reports. Their behavior reminds us of the altcoin craze in January 2018, when BTC started pulling out and altcoins were collected.

During a recent market peak, Bitcoin was sharply corrected as altcoins accumulated, and the market collapsed entirely in the following months.

With the major digital currencies rallying from 50% to 100% in recent weeks, Kelly is concerned about the rally in the altcoin market. He said:

“Bitcoin, more than any other asset class in the world, is more vulnerable to the FOMO than anything else. We are starting to see speculative coins and coins under $ 5 start to rise 30-40% per day. Things that happen in the short and medium term. . ”
The rise of altcoins has caused serious problems in the cryptocurrency market. For example, on November 24, the price of XRP jumped nearly 50% and topped $ 0.90 on Coinbase. Demand has risen to the point where it triggered a temporary drop in Coinbase, which coincided with lower bitcoin and Ether (ETH) prices.

Bitcoin addresses rise with overvalued
Kelly has consistently used Bitcoin address growth as a way to value BTC since 2017. When address growth does not match the price of BTC, it may mean that the value of BTC is overvalued.

For now, Kelly said the market expects a 25% hike in bitcoin prices next month. This is a worrying sign, Kelly said, and it could mean the market is overvaluing Bitcoin in the short term. He said:

“When I look at growth, we find that market prices are in line 25% with growth over the next 30 days. Any time such a large increase in the headlines is expected, this is a warning sign.
The rate of future funding is high
Finally, Kelly noted the increasing rate of funding for permanent Bitcoin futures contracts on major exchanges.

When the funding rate rises, this means that the market is dominated by buyers and holders of long-term contracts, which increases the likelihood of long-term downturns or setbacks. He don:

“The last thing we’re starting to see is retail entry into this market, and you’re starting to see your margin interest rates increase a lot.”
A counterargument against the domestic $ 19,000 hike
However, over the past two days, Bitcoin’s futures financing rate has stabilized after the Bitcoin price fell from $ 19,400 to $ 18,700.

But while the funding ratio is still higher than normal, it is hovering around 0.03%. In comparison, the funding ratio fluctuated 0.18% across the major exchanges amid the recent rally.

The market is getting less hot, while many titles remain profitable. The combination of these two factors can allow the rally to continue in the short term.

Google Trends data also shows that the ongoing rally is generating less interest overall than it was three years ago, indicating that the rally is only in its infancy. The popularity of the keyword ‘Bitcoin’ on Google searches accounts for only 20% of the interest seen at the end of 2017.

Source: CoinTelegraph

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