On-chain and exchange data suggest that the correction may be coming to an end.
$113,000 and $126,000 would be next targets for bitcoin, analyst says.
After reaching an all-time high above $126,000 just over two weeks ago, the price of bitcoin (BTC) has experienced a correction that places it at around $109,000 at the time of writing.
According to derivatives market data, this adjustment phase could be coming to an end, although the general sentiment of bitcoin and cryptocurrency traders seems to indicate otherwise, leading to what one analyst has called a “disbelief phase.”
An analysis published on the CryptoQuant platform by the trader who identifies himself as ‘darkfost’ suggests that The market shows signs of skepticism. “When a correction comes to an end and a new trend begins to take shape, the market often enters what we call a phase of disbelief,” notes the analyst. He adds that it is “that moment when investors, still shaken by the previous decline, struggle to believe that the trend could really turn bullish again.”
This behavior is particularly visible in financing rates (funding rates) of the futures markets. According to the report, on the Binance exchange, rates remain negative, “a clear sign that short positions continue to lead.” This situation, he points out, derives from the massive liquidation event that occurred on October 10, which was reported by CriptoNoticias and affected the confidence of operators.
However, the analyst considers that This panorama could have an effect opposite to what was expected. “Paradoxically, the longer this disbelief persists, the stronger the potential for an explosive bullish movement becomes,” he says.
If the upward trend consolidates, the accumulation of short positions could act as “a powerful fuel for the next leg higher”.
An increase in price would liquidate these positions, generating a phenomenon known as short squeeze. In that scenario, according to the analysis, the rally could quickly extend to important liquidity zones around $113,000 and potentially to the $126,000 region.