Bitcoin Is Turning Bullish and It’s Significantly Undervalued According to One Analyst
Bitcoin traders are going bullish now that the price is above $10,700 USD ($14,300 Canadian). Bitcoin’s funding rate across futures exchanges is currently neutral or negative throughout most of the futures market. When the funding rate turns negative the way it is now, it means the majority of options investors are actually shorting the market and rooting for the price to go down. But when the funding rate is negative, this causes a short squeeze.
It indicates that short positions are actually overcrowded and the price is likely to go up. Especially when big-time buyers (whales) start to cash in their options. See the chart below from WhaleMap showing that big-time buyers are moving a lot of coins over the last few months:
Add to that the impact of the second wave of the coronavirus, the fact that the American dollar continues to weaken and what appears to be the temporary suspension of any further stimulus packages in the United States and you have a recipe for lots of volatility. That’s part of the reason Michael Van De Poppe, an experienced trader at the Amsterdam Stock Exchange is predicting Bitcoin could reach as high as $11,400 USD in the near future.
Senior Analyst at Bloomberg Agrees
Not only does Mike McGlone, commodity strategist at Bloomberg, agree with van de Poppe, he actually thinks Bitcoin has way more upside. McGlone’s price target sits at $15,000 USD in the near future. That’s $20,000 Canadian. That inches the market closer and closer to the $25,000 USD high that occurred during the 2017 Bitcoin boom.
McGlone points out that the current number of active Bitcoin addresses is a key metric in suggesting what the price will be and that the current number is close to what it was in 2017, according to this chart from Glassnode.
With key options trades expiring this week and analysts suggesting that there is plenty of room for Bitcoin to go up, it seems now is as good as any time to consider investing in cryptocurrency. If you’re looking for a cryptocurrency exchange in Canada you can trust, look no further than Netcoins.
Written by: Jack Choros
Writer, content marketing at Netcoins.