Three Reasons Why Bitcoin [BTC] Bulls are Not Yet Tired

By Nivesh Rustgi
Published July 28, 2020 Updated July 29, 2020
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Three Reasons Why Bitcoin [BTC] Bulls are Not Yet Tired

By Nivesh Rustgi
Published July 28, 2020 Updated July 29, 2020

Bitcoin [BTC] bulls experienced a euphoric rise in its price, first time after the halving pump. It also broke above significant resistance from the $10,000-$10,500 range and continued its upswing to a high above $11,400.

Weakness in the Dollar

The rise in Bitcoin [BTC] following the surge in inflation hedges like Bitcoin and Gold is coming off as a strong positive signal. Charles Edwards, on-chain analyst and Founder at Capriole Investments, tweeted,

This huge $2000 move in #Bitcoinis all the more sweet given it was done with Gold, not stocks. In a tumultuous year, Bitcoin is proving itself a safe haven. Crushing all other asset classes and up over 50%.

You just have to be patient. Just. Getting. Started.

The U.S. Federal Reserve and almost all central banks around the world are moving towards the devaluation of their currency by implying passing massive QE bills passed by governments. The declining dollar is causing a flight to other assets, focusing on low-risk. Bitcoin [BTC] seems to be standing out due to its design and acceptance by hedge fund managers and other institutional investors.

Futures Monthly Basis Points

The bull market is driven by the discrepancy between demand and supply. Nevertheless, an extension of such trends leads to massive euphoria. This is represented by over-leverage long trades on derivates markets. When the incentives for high volume traders become far more attractive for selling at a premium than indulging in the risked longs, the price plummets.

While the periodic funding rate is rising to massive proportions which favour the bears, the basis point on monthly futures still has room to grow. Alex Kruger, an Economist and trader tweeted,

The June 2019 and February 2020 tops happened when the 3 month basis hit >23% on Bitmex & >24% on Deribit. On Jun/26 and Feb/13. This only happened one other time, Jun/23/2019, also right before a major correction.

Currently, Bitmex’s 3-month basis is at 12%. Moreover, compared to the previous time in 2019, the massive action was mostly driven by demand as only $133 million short orders got liquidated on BitMEX driving out expectations of a short-squeeze.

Price Discovery

Furthermore, on the technical front, the price closed above resistance from the long-term trend line on a weekly scale. Following the close, the bulls log a 10.7% rise in the next two days strengthening the breakout.

This significant move has figuratively opened a new price discovery phase for Bitcoin which could lead to new massive targets.

price discovery
Bitcoin [BTC] Price Discovery Phase (TradingView)
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Nivesh Rustgi
1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)

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