Bitcoin [BTC] along with the wider cryptocurrency market witnessed a minor recovery on the 4th of October that could be attributed to a “buy the rumor” scenario as traders awaited the release of US jobs data. Leading this recovery charge was Celestia [TIA], posting a notable 12% increase in a 24-hour period to hit $5.19 at the time of writing.
Despite this recent uptick, TIA had still faced a downturn of approximately 20% over the course of the last week. With bullish sentiments surrounding TIA on the rise, the question arises whether the current upward trend will be sustained or if profit-taking activities might trigger a corrective price action.
Evaluating Celestia’s Bullish Pattern
An interesting development on the daily chart for Celestia is the formation of a cup and handle pattern, typically indicating a bullish continuation and a potential price surge.
For this pattern to hold true, a surge in buying volumes is crucial. The volume histogram bars have transitioned to green, indicating a rise in buying pressure that has outpaced selling pressure.
Nevertheless, a strong buying signal will emerge once the Relative Strength Index (RSI) crosses over the signal line. Presently, the RSI trend is pointing upwards, but bullish momentum has yet to be confirmed to support further advances.
A similar observation can be made with the Chaikin Money Flow (CMF), which is currently at a negative value of -0.04. This metric signals a higher selling pressure compared to buying pressure. A shift towards positive territory could pave the way for a breakout from the current pattern.
If the bullish scenario plays out, TIA could potentially see a 35% surge from its current price, aiming to test resistance at the breakout level of $6.92. A successful bullish breakout could potentially pave the way for a more pronounced uptrend.
Examining Liquidation Data
Analysis of Celestia’s liquidation heatmap reveals a notable disparity between short and long positions on TIA, with a higher concentration of short positions indicating a prevailing bearish sentiment among traders.
Further scrutiny of the funding rates reinforces this bearish narrative. TIA’s funding rates have predominantly remained negative since early September, indicating a lack of confidence among traders regarding a sustained rally in TIA.
Extended periods of negative funding rates have the potential to drive prices downwards in the absence of a shift towards positive market sentiment.
Moreover, open interest remains elevated at over $200 million at the current time according to Coinglass. This data implies that traders who have taken short positions on TIA are holding on to their positions despite the recent price rebound.