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.
“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.Check Price Action
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Featured Image: Shutterstock/kkssr/Konstantin Faraktinov