Key insights:
Bitcoin surged 4.5% in 48 hours, recovering to $114,000.
A shift in BTC’s open interest indicates a healthier upward trend following extensive de-leveraging.
A CME gap near $111,300 poses a short-term risk to the bullish trend.
Bitcoin (BTC) saw a 4.5% increase in under 48 hours, reaching $114,000 on Monday. This rebound followed a significant correction from Monday to Saturday last week, during which data showed that the downturn was more about long positions adjusting rather than aggressive short selling, setting a solid foundation for future gains.
From Sept. 21 to Sept. 27, Bitcoin fell to $109,500 from $115,600, a 5.3% decrease, alongside a 6.2% reduction in futures open interest (OI) to $39.9 billion from $42.6 billion. The 30-day price and OI correlation tightened to +0.46, indicating that long positions were reducing rather than short positions driving the price down. Such adjustments often eliminate excess leverage, leading to healthier price rallies.
Spot market conditions are also improving. Buyers are continuing to dominate centralized exchanges, with net 30-day flows in negative territory at approximately 170,000 BTC, signifying that more coins are exiting exchanges than entering. This trend often indicates accumulation and decreased selling pressure.
Furthermore, Crypto market analyst Dom noted that the immediate target could be above $115,000. The analyst remarked,
“The liquidation divergence has played out quite effectively. Spot order books remain thin up to ~$115K on Binance. Thin books = easier to shift price. We still need the bulls to maintain aggression to reach that level.”
Funding rates have relaxed to a neutral zone, diminishing the risk of cascading long squeezes and instead supporting a gradual increase in leverage. However, there’s a disconnect between the aggregated spot cumulative volume delta (CVD) and OI.
Spot CVD has stayed mostly flat during Monday’s rally, while OI is steadily rising. Continued stability above $113,000 could attract late spot bids, setting the stage for the anticipated “Uptober” rally.
Related: $300K Bitcoin target ‘becoming increasingly plausible,’ analyst states
CME gap risk persists near $111,300
Even with Bitcoin’s rise above $114,000, derivatives traders are keeping an eye on an unfilled CME gap between $111,300 and $110,900. CME gaps appear when Bitcoin futures on the Chicago Mercantile Exchange close for the weekend and reopen at a different price point, creating a visible gap on charts. Historically, BTC tends to revisit these levels, with every gap since June having been fully closed.
This suggests a potential short-term retreat toward the $111,000 area can’t be dismissed before a recovery rally can reach higher. The CME gap aligns with a fair value gap, and a dip to $111,000 would also capture the internal liquidity block between $112,300 and $111,400.
Consequently, a short-term dip in this range remains plausible in the coming days. A significant daily close above $115,000 would invalidate immediate bullish concerns, perhaps lowering the likelihood of a drop to $111,000.
While historical patterns indicate that CME gap fills aren’t guaranteed, the recent 100% closure rate makes it a vital technical aspect for traders assessing near-term risks within Bitcoin’s broader bullish outlook for Q4.
Related: BTC price poised for $108K bounce: 5 points to consider in Bitcoin this week
This article does not constitute investment advice or recommendations. All investment and trading actions come with risk, and readers should perform their own research before making decisions.
