Key points:
The ability of Bitcoin traders to surpass price resistance at $116,000 may depend on the Fed’s interest rate decision on Wednesday and the US-China trade summit taking place this week.
Professional traders are distributing during BTC price rallies, while retail investors are buying the dips in spot markets, experiencing liquidations in futures.
Bitcoin (BTC) continues to exhibit strength, climbing 13% since its significant liquidation-driven drop on Oct. 10, but technical indicators suggest that daily closes above $116,000 are necessary to confirm a bullish trend reversal.
Data from TRDR indicates that sellers are limiting recent intra-day breakouts above $116,000, with order book data from Binance and Coinbase highlighting a significant wall of sell orders at $116,000 (Coinbase spot) and $117,000 to $118,000 (Binance perps).
The order book chart shows that futures traders have removed their sell orders at $115,000 to $116,000 as the potential for a resistance breakthrough increases, with short liquidations exceeding $49.83 million in the last 12 hours.
While bulls face challenges in pushing BTC above $116,000, some optimistic signs are evident in the data. Global exchange open interest has climbed to $31.48 billion from a low of $28.11 billion on Oct. 11, but it remains far from the $40.39 billion recorded when Bitcoin traded at $124,600.
Spot Bitcoin ETF inflows also show an increase, with $260.23 million in net flows over the past three trading sessions, and a notable $477 million inflow recorded on Oct. 21, shortly after BTC’s price fell below $108,000.
Data from Hyblock reveals that larger investors (those trading between 1 million and 10 million) are continuing to sell during price rallies, while smaller retail investors (those trading between 1,000 and 10,000) are consistently buying the dips.
Currently, Hyblock’s aggregated order book bid-ask ratio (set to 10% depth) indicates an ask-heavy order book, whereas leveraged retail longs (an account metric combining true retail longs and shorts) show an increase in short positioning at Binance.
From an intra-day trading perspective, some investors may be reducing risk exposure ahead of Wednesday’s FOMC meeting, during which the US Federal Reserve is expected to announce its interest rate decision.
Although a 25 basis point cut to the benchmark rate is anticipated, traders adjusting their positions prior to the announcement has become commonplace in the crypto market.
Related: Bitcoin price taps $116K as analysis weighs odds of CME gap fill
Futures market activity suggests that some traders are anticipating a reduction in perpetual swap positions and possible declines in long liquidity, or an increase in shorts designed to trigger liquidations on the downside.
This phenomenon is illustrated in the following chart, where a cluster of leveraged longs around $112,000 to $113,000 is currently facing liquidation.
While a bullish outcome is expected from Wednesday’s FOMC, another significant risk looms: President Trump’s meeting with Chinese President Xi Jinping on Thursday. If the discussions falter or market perceptions regard the resulting trade deal as unfavorable to the US and global markets, negative repercussions could affect both equity and crypto markets.
Until the resolution of this week’s FOMC and US-China trade discussions, it seems probable that Bitcoin will fluctuates 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.
