Bitcoin Surge Slows Down as Prices Remain Under $104K, Expert Highlights Derivatives Strain

Earlier this week, Bitcoin saw a significant rise, exceeding $104,000, and achieving almost a 10% gain over the week. Following this peak, however, the asset has faced some resistance, leading to a slowdown in its upward movement and resulting in relatively stable price actions in recent days.

Currently, Bitcoin is priced at $103,663, representing a slight increase of 1.7% in the last 24 hours. Amidst this price activity, a leading analyst from CryptoQuant, Darkfost, shared his thoughts on the current market stagnation.

Derivatives Market Activity Signals Short-Term Uncertainty

In his observations on social media, Darkfost indicated that the slowdown can be traced back to the derivatives market. He noted that the cumulative net taker volume, which measures market order net volume, has been in negative territory since Bitcoin surpassed the $100,000 mark.

This situation indicates a larger number of eager sell orders compared to buy orders, putting consistent downward pressure on prices. The net taker volume serves as an indicator of current trader sentiment; when it stays negative, it typically suggests that traders are anticipating a price drop, inciting further short-selling.

Darkfost underscored that this trend illustrates a rising uncertainty among traders about Bitcoin’s immediate prospects for reaching new all-time highs. Despite positive long-term sentiment, the imbalance in derivatives activity reveals a more cautious stance among traders.

He expressed, “It clearly reflects a growing sense of doubt among traders regarding Bitcoin’s ability to reach a new all-time high in the very short term. In such a context, the market loves to prove them wrong.” This cautious mindset has contributed to a deceleration in Bitcoin’s rally, even as it remains close to its January peak.

Bitcoin Technical Setup Hints at Bullish Continuation

Meanwhile, technical analyst Javon Marks pointed out chart patterns that suggest a possible continuation of Bitcoin’s bullish trend. He noted the emergence of a bull flag, a pattern often viewed as a brief pause before continuing an upward trajectory. “Bitcoin appears to be forming a bull flag right below its all-time highs. A breakout could push it above,” Marks suggested.

If this pattern holds true, it could indicate renewed upward pressure and pave the way for another price increase. Moreover, Marks observed that altcoins are displaying similar trends to past market cycles, especially the surges witnessed in 2017 and 2021. He proposed that the current period might precede a broader rally in altcoins, which historically follows Bitcoin’s movements.