Bitcoin may be dripping lower at spot rates. Still, one analyst is unfazed, expecting the coin to reverse recent losses and snap up firmly before peaking in December 2024. At spot rates, BTC is down roughly 11% from 2024 peaks and struggling to generate sufficient buying pressure, looking at the formation in the daily chart.
Will History Support Bitcoin And Rally To Fresh Highs?
Taking to X, the analyst highlights historical price patterns using the 2-week Fisher Transform indicator, a tool for picking out potential reversal zones like double tops or bottoms. Though the technical indicator lags, it has accurately picked out peaks in the past.Â
In 2021, when Bitcoin soared to over $69,000, the Fisher Transfer indicator printed a signal, highlighting potential peaks. In the coming weeks following this signal, prices crashed.Â
By the end of 2022, Bitcoin had fallen to as low as $16,000, accelerated by the collapse of FTX and the bankruptcy of several other popular crypto hedge funds, including Three Arrow Capital (3AC).
The analyst also emphasizes the importance of the indicator in differentiating between a double top, mirroring 2017 and 2021, and a potential single peak later this year.Â
Presently, the trader said prices are approaching 2017 levels. Then, prices created what the analyst described as a “more subtle initial rise” before peaking six months later at over $20,000.Â
If this leads, and the indicator “pauses” where it is, Bitcoin will likely record a “single top.” However, only time will tell where this top will be at.
Hedge Funds Were Selling At Tops?
This prediction comes amid significant bearish bets by leveraged hedge funds. Data from the United States Commodities Futures Trading Commission (CFTC) reveals that these funds held record “short” positions in Bitcoin futures contracts by last week.Â
Observers note this was the largest short position since 2017, at over 16,000 contracts. By shorting, they expected prices to dump, which is precisely what’s happening at spot rates.Â
However, even as hedge funds short, another analyst, responding to the trend, said the futures premium remained high. This is a development that some of these crypto hedge funds are taking advantage of.
The number of shorts could increase in the days ahead as United States Federal Reserve officials appeared to be hawkish and upbeat economic data started pouring in. Being a data-driven central bank, the Federal Reserve might not slash rates as fast as initially projected.
