Main Takeaways:
The ability of Bitcoin traders to surpass the price resistance at $116,000 may depend on the Federal Reserve’s interest rate decision on Wednesday and the ongoing US-China trade summit this week.
Professional traders are distributing during BTC price rallies, while retail investors are purchasing dips in the spot market and facing liquidations in futures.
The price of Bitcoin (BTC) continues to exhibit resilience, having risen 13% since the major liquidation-driven sell-off on October 10, though technical analysis suggests that daily closes above $116,000 are necessary to confirm a bullish trend reversal.
According to data from TRDR, sellers are limiting recent intra-day price breakouts over $116,000, with order book data from Binance and Coinbase showing significant selling interest at $116,000 (Coinbase spot) and $117,000 to $118,000 (Binance futures).
The futures order book, illustrated in the lower left-hand corner, shows traders retracting their asks in the $115,000 to $116,000 range as momentum builds towards challenging the resistance, leading to short liquidations exceeding $49.83 million in the past 12 hours.
Despite the challenges bulls face in pushing BTC past $116,000, some positive indicators emerge from the data. Global exchange open interest has rebounded to $31.48 billion from a low of $28.11 billion observed on October 11; however, this remains far from the $40.39 billion figure seen when Bitcoin traded at $124,600.
Spot Bitcoin ETF inflows are increasing, with $260.23 million in net flows recorded over the past three trading sessions and a noteworthy $477 million inflow on October 21, shortly after BTC price dipped below $108,000.
Data from Hyblock indicates that larger order-size investors (ranging from 1 million to 10 million) continue to sell during price rallies, while retail investors (with smaller order sizes of 1,000 to 10,000) are buying the dips.
At present, Hyblock’s consolidated order book bid-ask ratio (set to 10% depth) reflects a sell-heavy order book, while the true measure of retail longs and shorts metrics reveals a rise in short positioning on Binance.
From an intraday trading perspective, some investors might be reducing their risk exposure in anticipation of Wednesday’s FOMC meeting, during which the US Federal Reserve will announce its interest rate decision.
Though the Fed is projected to lower its benchmark rate by 25 basis points, it has become common for traders to adjust their positions ahead of such announcements in the crypto market.
Related: Bitcoin price hits $116K as analysis evaluates the potential for CME gap filling
Futures market activity suggests that some traders may be bracing for potential long liquidations following a reduction in long liquidity, or alternatively, they may be gearing up to capitalize on short opportunities that could trigger additional liquidations.
This speculation can be observed in the succeeding chart, where a concentration of leveraged long positions around $112,000 to $113,000 is currently being liquidated.
While a bullish outcome is anticipated from Wednesday’s FOMC meeting, a significant risk factor lies in US President Donald Trump’s upcoming meeting with Chinese President Xi Jinping on Thursday. Should negotiations falter or if the resulting trade agreement is perceived unfavorably by US and global markets, it could provoke negative reverberations across equities and crypto.
Until this week’s FOMC and resolution of the US-China trade deal, it seems probable that the Bitcoin price will oscillate between resistance at $116,000 and support at $110,000.
This article does not offer investment advice or recommendations. All investment and trading movements come with risks, and readers should conduct their own due diligence before making any decisions.
