Key points:
The ability of Bitcoin traders to break through the $116,000 price barrier may depend on the Fed’s interest rate decision on Wednesday and the US-China trade summit happening this week.
Pro traders are selling into BTC price surges, while retail investors are purchasing dips in the spot market, but are facing liquidation in futures.
Bitcoin (BTC) price remains robust, climbing 13% since the liquidity-driven sell-off on October 10. However, technical indicators suggest that daily closes above $116,000 are essential to confirm a bullish trend reversal.
Data from TRDR reveals that sellers are suppressing recent intra-day breakouts above $116,000, and order book data from Binance and Coinbase point to a significant sell wall at $116,000 (Coinbase spot) and $117,000 to $118,000 (Binance perps).
The order book chart shows that futures traders have withdrawn their sell orders at $115,000 to $116,000 as the potential for a breakout increases, with short liquidations exceeding $49.83 million in the past 12 hours.
Despite challenges pushing BTC above $116,000, there are some encouraging signs. Global exchange open interest has improved to $31.48 billion from a low of $28.11 billion on October 11, although this is still far from the $40.39 billion recorded when Bitcoin was trading at $124,600.
Spot Bitcoin ETF inflows are also rising, with $260.23 million in net flows over the past three trading sessions, including a significant $477 million inflow on October 21, just days after BTC fell below $108,000.
According to data from Hyblock, larger order-size investors (1 million to 10 million) are continuing to sell during price rallies while retail investors (smaller order-size, 1,000 to 10,000) have been buying the dips.
Currently, Hyblock’s aggregate orderbook bid-ask ratio (set to 10% depth) indicates an ask-heavy orderbook, whereas the true metrics for retail long and short accounts reflect increasing short positions at Binance.
Intra-day trading suggests some investors may be reducing their risk exposure ahead of Wednesday’s FOMC meeting, where the US Federal Reserve will unveil its decision on interest rates.
While a cut in the benchmark rate by 25 basis points is anticipated, it has become commonplace for traders to adjust their positions prior to the announcement in the crypto market.
Related: Bitcoin price taps $116K as analysis weighs odds of CME gap fill
Futures market activity might indicate that some traders expect perps to decrease and the subsequent drop in long liquidity, or alternatively, an increase in short positions might present an opportunity for triggering liquidations on the downside.
This scenario is illustrated in the chart below, where a cluster of leveraged longs at $112,000 to $113,000 is currently facing liquidation.
While a bullish outcome is expected from Wednesday’s FOMC, a key risk event is US President Donald Trump’s meeting with Chinese President Xi Jinping on Thursday. If negotiations break down or the market perceives the resulting trade deal unfavorably for the US and global markets, negative repercussions could affect both equities and crypto.
Until the resolution of this week’s FOMC and US-China trade discussions, it appears likely that Bitcoin price will oscillate between resistance at $116,000 and support at $110,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
