[Analysis] "Bitcoin Enters a 'Disbelief' Phase... Could Instead Become an Upside Driver"

Recently, Bitcoin (BTC) has been undergoing a correction, raising concerns among investors about further declines. However, some analysis suggests that this situation could instead trigger a larger rally.

On the 20th (Korean time), CryptoQuant contributor DarkPost wrote in a report that "the entire market remains in the 'disbelief' phase." He said, "The shock from the previous downtrend lingers, so investors do not believe in a bullish reversal," adding that "this sentiment is particularly evident in the derivatives market."

DarkPost focused on funding rates in the futures market. He noted, "Binance's funding rate — which currently accounts for the majority of Bitcoin futures trading — remains negative at around -0.004%," and said, "The fact that the funding rate was negative on six of the past seven days suggests that short sellers still dominate the market." He added, "Traders' confidence was severely shaken after the large-scale liquidation on October 10, and has not yet recovered."

The contributor's view is that under these circumstances a larger rally could occur. He said, "Most investors are betting on further drops out of fear of another crash, but the longer this 'disbelief' period lasts, the greater the possibility of a strong bullish reversal," and "If an uptrend takes hold, a short squeeze from the liquidation of short positions could push Bitcoin up to key liquidity zones around $113,000, and even toward $126,000 in a short period."