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$112 million flows into Berachain, but why is BERA still bearish?
The cryptocurrency market has been plagued by uncertainty and volatility over the past few days. In an unexpected turn of events, massive liquidity inflows have flooded Berachain’s (BERA) network. Over the past 24 hours alone, $112.8 million worth of BERA was purchased, a staggering figure that would normally be expected to trigger a significant price surge. However, despite this influx of capital, BERA’s value continues to decline.
This anomaly has sparked confusion among investors and analysts alike, who are struggling to understand why the asset is not reflecting the unprecedented inflows. At first glance, it may seem that the market is experiencing some sort of cognitive dissonance – a phenomenon where conflicting information creates psychological discomfort, leading individuals to disregard or deny reality. But there’s more to this story.
Berachain’s (BERA) chart paints a different picture. Over the past week, BERA has experienced a sharp decline, with a staggering 10.65% drop in value. This downturn is not unique to Berachain alone; many other market participants have also suffered significant losses during the same period. As such, it’s crucial to consider this broader context before drawing any conclusions.
One possible explanation for BERA’s bearish sentiment lies in its derivatives markets. The Funding Rate, a metric used to assess market trends by analyzing whether long or short traders are paying a premium, reveals that short sellers have taken control of the narrative. With a reading of -0.0834, it’s clear that there is no shortage of short positions on the market.
This development has significant implications for investors, as it suggests a lack of confidence among market participants. It is important to note that traders holding these short contracts are paying a fee to maintain their positions, which underscores the bearish sentiment and potential risks involved.
While this data may seem bleak, there are signs of recovery on the horizon. The 4-hour chart shows a perfect bounce from a key support level at $5.538, forming three consecutive bullish candles. If momentum slows and this support acts as a catalyst, BERA has two potential target levels: one at $7.20, representing a 30% increase, and another at $8.89, signifying a 60% rise.
However, for any of these scenarios to unfold, it is essential that bearish trends slow and the market’s sentiment shifts towards the positive.
Source: https://ambcrypto.com/112-mln-flows-into-berachain-but-why-is-bera-still-bearish/
