Bitcoin has seen some wild swings lately, with the cryptocurrency’s price fluctuating between the lower and upper $30,000 region.
BTC has found strong support in the lower part of this range, with sellers making multiple unsuccessful attempts to break through it.
The cryptocurrency has also seen large bouts of buying activity to counter the selling pressure that seems to be coming from large whales on Coinbase and Binance.
Once these bears lift their selling walls or run out of coins to sell, BTC could start to fly higher.
One trader now notes that although the cryptocurrency appears to be positioned for further upside, the high funding rates remain a potential catalyst for a long squeeze.
Bitcoin has seen some positive price action this morning, with the cryptocurrency rebounding after a sharp sell-off overnight that sent the cryptocurrency to lows of $34,800.
The buying pressure here proved significant and helped spark a rebound that is still unfolding as we speak.
The price of BTC rose as high as $37,500 before facing an influx of buying pressure that slowed its climb.
BTC still looks strong, and there is a strong possibility that it will continue to rise in the near future once $37,000 becomes support.
One analyst warns against getting too euphoric, as the high funding rates would indicate that there could be a long squeeze in Bitcoin’s future.
Bitcoin recovers after sharp overnight selloff
At the time of writing, Bitcoin (Go to Buy Bitcoin Guide) is trading at $36,500, marking a remarkable recovery from its sub-$35,000 low reached just a few hours ago.
The medium-term trends are likely to depend on Bitcoin’s further reaction to $37,000. This is a resistance level for BTC that would make a flip to support technically significant.
Analyst: BTC’s high funding is a risk to the uptrend
An analyst writes in a recent tweet that Bitcoin’s near-term upside potential is currently being hampered by high funding rates for leveraged positions.
This could suggest that being long is an incredibly crowded trade and that a bitcoin long squeeze is imminent.
„TWAPs & daily openings seem to be really important these days. Funding is pretty high again, so I don’t think there’s much room for further upside.“
Image courtesy of Byzantine General.
The coming days should shed some light on Bitcoin’s prospects, with the reaction to $37,000 and eventually $40,000 setting the tone for where it is headed in the medium term.