Concerns over possible U.S. regulation add to nerves as market sentiment calls for losses, not gains, to form the next moves of Bitcoin.
Bitcoin (BTC) created resistance at $37,500 on Friday amid an increasing consensus that a new dive was underway.
Funding signals dip expectations
Data from Cointelegraph Markets Pro and TradingView revealed $37,500 as the ceiling that capped-price action overnight into Friday.
BTC/USD had recovered from a trip to local lows of $35,500 after comments from the United States Federal Reserve, but previous highs still eluded bulls.
Now, with funding rates continuing into negative territory, it seemed that the market expected another investigation of the area closer to $30,000 support.
“Funding turned even more negative post FOMC as investors were spooked by Powell’s resolve to fight inflation,” a report from crypto research firm Delph Digital summarized.
“All in all, it seems like the market is expecting Bitcoin to make a lower low after recently testing the $34K level.”
While sustained low funding rates provide fuel for a “squeeze” of unsuspecting shorters, mixed emotions prevailed Friday amid news that the U.S. government was allegedly preparing an executive order on cryptocurrency.
Upheaval on the regulatory front, which would come after a debate over the environmental impact of mining, also echoes the arduous journey of a Congressional Bill last year that saw fierce opposition over its treatment of crypto for tax purposes.
With short timeframes looking unappetizing, hopeful analysts turned to investor behaviour for cues.
Popular Twitter account Material Scientist, the creator of on-chain analytics suite Material Indicators, noted increased sustained buying by one entity this week.
Bollinger adds “trial” Ether position
Altcoins continued to follow in step with Bitcoin, the 24 hours to Friday seeing limited moves either way.
Ether (ETH), the largest altcoin by market capitalization, traded up 1.1% as signs began to turn in its favour as an investment at current levels.
For John Bollinger, creator of the well-known Bollinger Bands indicator, it was time to build an ETH position.
“I bought a little $ethusd, a trial position, last night, with a close stop–well close for crypto… I liked the pattern on the six-hour and have been looking for an entry, he revealed on Twitter.
“Not a high confidence trade and I am probably early, but toe is in and I am focused now.”