Bitcoin (BTC), the first and largest crypto asset by market cap in a bulls’ attempt retested the key $11,000 level on Wednesday, September 16th. It failed to sustain this momentum as it was rejected subsequently to lows of $10,735 within 24 hours. However, a quick rebound saw the flagship crypto-asset setting an intraday high of $10,977 on Thursday.
In a test of strength, BTC retested the $11,000 key level again today and was met with rejection to trade presently at $10,857 at the time of writing.
BTC/USD Daily Chart
The second-largest crypto asset by market cap opened Thursday’s trading session at a low of $363.40, and within only one hour it was already up by 5.69%. It seems to have been positively impacted by the Uniswap news coupled with the progress made on the ETH 2.0 launch.
However, despite ETH upside pressure seen at the start of the day, such price action did not spill over the next 17 hours. ETH rather entered a consolidation range between $378 and $394. ETH is presently trading at $379 at the time of writing.
A look at the top two cryptocurrencies by market cap from a higher time frame seems to indicate both forming bearish patterns despite the rising prices. Bitcoin’s green 9 candlesticks on its daily chart and Ethereum’s bear flag pattern paint a different story to the price action seen on the lower time frames.
This Is What Key and On-Chain Indicators Are Insinuating
Despite the BTC price increase in the last three days, derivatives indicators and the top traders’ net long/short ratio maintained their status quo.
#Key Indicator One: Bitcoin’s Funding Rate
The funding rate is a small fee paid by one side of the contract to the other (e.g. Longs pay Shorts or vice versa). For most exchanges, the changes in funding rates are reflected every 8 hours. A bull run usually leads up to a positive funding rate and otherwise, but there are no absolutes. In a bull run, the liquidation of short-sellers coupled with additional positions will squeeze up the funding rate.
Bitcoin Perpetual Swaps 8-Hour Funding Rate. Courtesy: Skew
Recent data indicated that despite BTC price rise, the funding rate has maintained the negative territory it entered since September 3rd. Ultimately, this recent price increase didn’t impact the funding rate.
#Key Indicator Two: Trading Volume Versus Trading Sentiment
Recent Data from Messari gives the adjusted aggregated volume to be $2.15 billion for Sept. 15 and 16. Although 13% above the previous 7-day average, it is way below the $3 billion peak levels seen in the last two months.
Any price rise not backed by a significant trading activity casts doubt in the minds of traders. Data from Binance regarding top traders’ long-to-short net positioning which measures professional traders sentiment indicated most are on net longs marking an 8-week low of 1.12. OKEx top traders sentiment metric also declined to 0.80 from a 1.18 peak on Sept. 3.
#On-Chain Indicator: Ethereum Daily Transactions
Ethereum blockchain daily transactions just set a new all-time high despite the congestion rise on the network. Data from major Ethereum browser Etherscan indicated that on September 17, the number of daily transactions on the Ethereum network surged to 1,406,000 which is the highest number of daily transactions ever recorded on the Ethereum network.
Ethereum Daily Transactions Chart. Courtesy: Etherscan
It noted that the former all-time high of 1,350,000 daily transactions was set on Jan. 4, 2018. Following Uniswap’s UNI token launch, Ethereum transaction fees spiked to almost $1 million an hour on Sept. 18. This fresh all-time high of daily Ethereum transactions comes amid the on-going DeFi explosion.
Conclusively, it is notable to state that there are absolutely no bearish signals from any of these indicators. Instead, the market shows that traders are either in mild disbelief or simply are disinterested in participating at the current levels.
Image Credit: Skew, Etherscan, Shutterstock