- BTC has reclaimed the $63K range, fueled by a short squeeze, sparking market anticipation.
Yet, a substantial breakout remains unlikely.
As a seasoned crypto investor with battle scars from multiple market cycles, I must admit that the recent surge of Bitcoin [BTC] back to the $63K range has me cautiously optimistic. The short squeeze fueling this rally is indeed encouraging, yet I’m not ready to celebrate just yet.
As a researcher immersed in the digital currency landscape, I find myself exhilarated by the palpable excitement pervading the market as Bitcoin [BTC] surges back towards the significant $63K milestone. At this moment, BTC is being traded at $63,413, a development that suggests a robust potential for a noteworthy breakthrough in Q4.
After experiencing a short period of instability due to outside influences, it seems that market participants are once again in command, setting up Bitcoin for its next major shift or surge.
Despite optimism, worries persist since Bitcoin continues to be vulnerable to fluctuations in the derivatives market. These changes can lead to unexpected movements, potentially hindering any efforts towards a bullish recovery.
BTC grapples with increasing speculative control
Fortunately, speculation’s influence on Bitcoin (BTC) stays minimal at a rate of 2.5%, ensuring that its long-term perspective continues to be rather consistent.
However, there is a growing trend of traders looking to short Bitcoin over shorter timeframes.
If this ongoing trajectory persists, there’s a risk that Bitcoin’s price movements might become overly impacted by derivative products, potentially hindering efforts to surpass $100,000 by the end of the next year.
Source : Coinglass
Notably, as Bitcoin reached its all-time high of $73,000 in March, open interest (OI) soared over the 30-billion dollar threshold for the very first time, peaking at an impressive $36.44 billion.
In merely three months’ time, on July 28th, OI reached its peak at a staggering $37.22 billion, causing a surge in the market that eventually pushed Bitcoin back to around $54,000 within a single week.
In the daily chart, the extended red candles clearly illustrated the magnitude of the losses experienced during that particular period. At this moment, Open Interest (OI) is rising significantly, standing at approximately $34.33 billion as we speak.
As per AMBCrypto’s analysis, this ongoing trend may suggest a shift in the investment cycle towards an extreme level of investor greed, potentially leading to market conditions that are too heated or inflated.
Shorts resurgence poses a serious threat
Over the past day, there’s been a strong surge of sell-offs leading to complete liquidation at a 100% rate on the Bitfinex platform, as Bitcoin briefly touched the price point of $63,000.
Source : Coinglass
It appears that the increase in Bitcoin’s price might be due to traders covering their short positions, which necessitates purchasing BTC. This abrupt rise in buying interest frequently triggers a temporary price adjustment or correction in the near future.
As an analyst, I find myself observing a strong bullish trend in the derivative market, where long positions are predominantly in control. However, translating this near-term dip at around $63K into a long-term uptrend towards $75K appears to be a challenging prospect at the moment.
This concern is heightened by the expected resurgence of short positions, which seems imminent given the overextended OI levels.
Read Bitcoin’s [BTC] Price Prediction 2024–2025
Fundamentally speaking, Bitcoin appears quite fragile at the moment. Should it give in to influence from derivatives – a possibility that seems imminent – it could face resistance around the $64,000 mark, echoing the rejection experienced during the August surge.
As a researcher focusing on Bitcoin, I’m closely watching the increasing trend of traders who are shorting Bitcoin within brief periods. This activity poses a potential risk to the price level of $64K flipping from resistance to support. Therefore, it’s crucial to keep a vigilant eye on the derivative market for any significant shifts or trends.
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2024-10-07 16:08