Key highlights:
The ability of Bitcoin traders to break past the $116,000 price resistance may depend on the Federal Reserve’s interest rate decision on Wednesday and this week’s trade summit between the US and China.
Professional traders are selling into BTC price rallies, while smaller retail investors are buying the dips in the spot market, often facing liquidations in futures.
Bitcoin (BTC) continues to demonstrate strength, climbing 13% since the significant sell-off driven by liquidations on October 10. However, technical analyses indicate that daily closes above $116,000 are essential to confirm a bullish trend reversal.
According to TRDR data, sellers are limiting the recent intra-day breakouts above $116,000, with order book data from Binance and Coinbase showing another layer of sell orders at $116,000 (Coinbase spot) and $117,000 to $118,000 (Binance perps).
The order book chart in the lower left-hand side indicates that futures traders retracted their asks at $115,000 to $116,000 as the potential for a breakout grew, resulting in short liquidations surpassing $49.83 million within the last 12 hours.
While bulls are facing challenges in pushing BTC above $116,000, some positive trends are noticeable in the data. The global exchange open interest has rebounded to $31.48 billion from its low of $28.11 billion on October 11, although it remains well below the $40.39 billion recorded when Bitcoin was valued at $124,600.
Spot Bitcoin ETF inflows are also improving, with net flows of $260.23 million observed over the past three trading sessions, and a significant $477 million inflow recorded on October 21, shortly after BTC price dipped below $108,000.
Hyblock data indicates that larger investors (1 million to 10 million) are continuing to sell during price rallies, while retail investors (smaller order-size, 1,000 to 10,000) are buying during price dips.
At present, Hyblock’s aggregate bid-ask ratio (set to 10% depth) suggests a ask-heavy order book, and the metric tracking retail long and short positions indicates an increase in short positions at Binance.
From an intra-day trading perspective, some investors may be lightening their risk exposure ahead of Wednesday’s FOMC meeting, during which the US Federal Reserve will announce its interest rate decision.
Although a 25 basis point cut in the benchmark rate is anticipated, it has become common for traders to adjust their positions prior to such announcements in the crypto market.
Related: Bitcoin price touches $116K amidst analysis weighing the chances of a CME gap fill
Futures market activity could suggest that some traders are preparing for perps to ease off, potentially leading to a decline in long liquidity or, alternatively, an increase in shorts aimed at triggering liquidations on the downside.
This trend can be observed in the chart below, where a cluster of leveraged longs at $112,000 to $113,000 is currently facing liquidation.
While Wednesday’s FOMC is expected to bring a bullish outcome, a major risk factor is the upcoming meeting of US President Donald Trump with Chinese President Xi Jinping on Thursday. Should negotiations falter or result in an unfavorable trade deal perception for the US and global markets, negative repercussions might impact both equities and crypto.
Until the resolution of this week’s FOMC and US-China trade discussions, Bitcoin’s price may continue to oscillate between resistance at $116,000 and support at $110,000.
This article does not constitute investment advice or recommendations. Every investment and trading action involves risk, and readers should perform their own research when making decisions.
