On the 4th of October, Bitcoin [BTC] and the overall cryptocurrency market saw a modest recovery, possibly driven by a “buy the rumor” scenario as traders awaited the release of US jobs data. Leading this recovery was Celestia [TIA], which surged by 12% within a 24-hour period, reaching a trading price of $5.19 at the time of reporting.
Although TIA experienced a notable gain, with a rise of around 20% in the last week, there is growing optimism regarding its bullish potential. The key question now is whether the upward momentum will be sustained or if profit-taking activities might induce a price correction.
Analysis of Celestia’s Bullish Pattern
An intriguing development on the daily chart is Celestia’s formation of a cup and handle pattern, typically signaling a bullish continuation and potential price rally.
For this pattern to be validated, it necessitates accompanying growth in buying volumes. The volume histogram bars have shifted to green, indicating an upsurge in buying interest that has outpaced selling pressure.
However, a robust buy signal will only materialize when the Relative Strength Index (RSI) crosses over the signal line. Presently, the RSI trend is upward, but the actual bullish momentum is yet to be confirmed to bolster further advances.
A comparable scenario is observed in the Chaikin Money Flow (CMF), currently reflecting a negative value of -0.04. This metric highlights a prevalence of selling pressure over buying interest. A transition into positive territory could facilitate a breakout from the ongoing pattern.
If the optimistic outlook materializes, TIA could potentially surge by 35% from its existing price level to test a resistance barrier at $6.92, marking a significant milestone in its upward trajectory.
Evaluating Liquidation Data
An examination of Celestia’s liquidation heatmap reveals a notable predominance of short positions over long positions on TIA. This data signifies an inclination towards anticipating further price declines, indicating a prevailing bearish sentiment among traders.
Further scrutiny of the funding rates provides additional support for this bearish narrative. TIA’s funding rates have predominantly displayed a negative trend since the start of September, underscoring a lack of confidence among traders regarding an extended rally in TIA’s price.
Prolonged negative funding rates have the potential to propel prices lower if market sentiment fails to pivot towards a positive stance.
Moreover, the open interest remains notably elevated, exceeding $200M at present as per Coinglass data. This suggests that traders who have taken short positions on TIA are maintaining their outlook despite recent price recoveries.