"If you believe the current price increase, you'll be ruined"...Bitcoin begins 'disbelief rally' before crash

▲ Bitcoin (BTC)

An analysis suggests that Bitcoin (BTC) has entered a 'disbelief rally' phase, continuing its upward trend despite the persistent outlook for further declines.

According to Cointelegraph, a cryptocurrency media outlet, on April 26 (local time), despite Bitcoin's recent rebound, bearish bets continue to dominate the overall market, showing a typical 'disbelief rally' pattern. This refers to a phase where prices rise while investors continue to hold short positions, distrusting the uptrend.

This discrepancy is also confirmed by on-chain and derivatives data. Despite the price increase, bearish positions maintain an advantage in the market, with funding rates remaining negative, suggesting that investors consider the current rise a temporary rebound. Indeed, while Bitcoin has continued its upward trend in recent weeks, market participants' sentiment remains defensive.

Such a structure has been repeated in the early stages of past bear market endings. At that time, the market also distrusted the rise and continuously maintained short positions, and consequently, the liquidation process of these positions acted as fuel for further price increases. In other words, an analysis suggests that a paradoxical situation could arise where market pessimism actually strengthens the rally.

However, not all analyses are optimistic. Some analysts pointed out that futures premiums in the derivatives market are rapidly shrinking, which indicates a weakening upward momentum. In particular, the sharp drop in short-term basis means that the market is no longer assigning a premium to leveraged long positions, which is interpreted as a structural bearish signal.

Ultimately, the current Bitcoin market has entered a phase where bullish and bearish expectations clash extremely. If the rally continues amidst investor disbelief, it could lead to further upside potential, but at the same time, if the market structure weakens, the possibility of increased downward volatility cannot be ruled out.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*