On-chain analyst Will Clemente is revealing the level around which the price of Bitcoin (BTC) is likely to cluster.
Clemente first tells his 493,900 Twitter followers that a Bitcoin price of between $45,000 to $40,000 qualifies as a “local value zone” under the prevailing market conditions.
“… Personally, I see mid-low 40s as a local value zone, while ~53K reclaim regains momentum.
So with that in mind: buying above that would be buying when regaining momentum after coming out of a value zone.”
A value zone or value area is the level around which most of the trading volumes occur.
Clemente also says that “pressure” is building up for Bitcoin after the flagship crypto asset fell by over 15% in 30 days. Bitcoin is trading at $47,724 at the time of writing.
“Pressure building up for BTC.
Question is when & in what direction will it be released?
The question posed here is rhetorical. For trying to understand the aggression of positioning, we monitor derivatives data such as funding, liquidation levels, long/short ratio, etc.”
A funding rate of above zero indicates that the dominant sentiment is bullish while a rate in the negative levels indicates that the dominant sentiment is bearish.
An increasing funding rate also indicates bullishness while a falling funding rate indicates bearishness.
When the long/short ratio or open interest is increasing, it means there is support for the prevailing price trend while the opposite is true for a falling open interest.
Liquidation levels could affect the price either way as they could potentially lead to a short squeeze or a long squeeze.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/kkssr/Konstantin Faraktinov
