BTC price preserves $16.5K, but funding rates raise risk of new Bitcoin lows

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Bitcoin (BTC) staged a modest recovery on Dec. 29 as United States stock markets rebounded in step.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$10,000 BTC price targets stick

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD recovering above $16,600 at the Wall Street open after wicking below $16,500 for a second day.

The pair remained unappealing to traders, many of whom feared a deeper retracement may still occur around the new year.

In a list of potential “capitulation targets,” Crypto Tony doubled down on a price of $10,000 and lower for Bitcoin, while also revealing expectations for Ether (ETH) to dip as low as $300.

“Things change quick, but if we hit these areas I begin to ladder,” part of accompanying commentary read.

Daan Crypto Trades, meanwhile, put the current spot price at the bottom of an area that “must hold” for BTC bulls to have a shot at upside.

BTC/USD annotated chart. Source: Daan Cypto Trades/Twitter

“The entire market looks bad… Thing is that some altcoins look even worse,” Il Capo of Crypto continued, predicting forthcoming altcoin losses of up to 90%.

The downside thesis was supported by derivatives markets on Dec. 29, with funding rates positive while price action failed to rally.

“Layman terms, Long/Short ratio is positive first time since May, means more Longs than Shorts now, OI and Funding is positive, means people are betting on perpetual market BTC will pump, price structure looks bad and this can be easily another local top here and dump. Be careful!” popular commentator aQua summarized.

BTC/USD perpetual futures chart (Bybit) with long/short ratio. Source: aQua/Twitter

A slightly more hopeful perspective came from Blockware head analyst Joe Burnett, who argued that a painful period in Bitcoin’s history was slowly coming to an end.

“Everyone is bearish, yet Bitcoin is still trading around the same price it was in June ($17.5k),” he reasoned.

“The mining industry has been decimated, and many of the weak hands (BTC and ASICs) have been purged. Soon we will begin another slow ascent.”

U.S. dollar strength “wants to bounce”

Short-term BTC price action got a boost from U.S. equities, with the S&P 500 up 1.4% and the Nasdaq Composite Index gaining 2.1% in the first hour’s trading.

Related: Bitcoin price would surge past $600K if ‘hardest asset’ matches gold

The U.S. dollar continued a broader consolidation after two straight days of gains for the U.S. Dollar Index (DXY).

“Bitcoin swept the low / 16.5k, filled the FVG and put in a 3rd drive with multiple H1 bullish divergences. It is now or never for the bulls to take this back up,” entrepreneur Mark Cullen commented.

“Lose the 16.2k level and the yearly low will be in threat & lower + $DXY looks like it wants to bounce!”

DXY 1-day candle chart. Source: TradingView

With just two days until the weekly, monthly, quarterly and yearly close, BTC/USD was down around 60% year-to-date, 3% for December and 14.2% in Q4, data from Coinglass confirmed.

BTC/USD monthly returns chart (sceenshot). Source: Coinglass

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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