November 22, 2024
Bitcoin bulls fight to hold K as CME BTC open interest surpasses 100K

Bitcoin (BTC) price rose above $35,000 following a sharp rally and short squeeze on October 23 and is currently struggling to hold $34,000 levels.

In a market update on October 24, Capriole Investments founder Charles Edwards noted that after seven months of consolidation, Bitcoin’s rise melted the $32,000 resistance level “like butter,” and he predicted an upcoming monthly resistance level. Unlikely to be an obstacle.

Edwards explain:

“Before continuing, it would make sense to either have a quick continuation into the mid-range ($43,000) or a short-term consolidation between support and resistance at $320,000-35,000.”

As Cointelegraph mentioned in a previous price update,

“Successive daily closes above the $31,700 level would be noteworthy, as higher daily or weekly high candles above this level take the price above a key pivot point and into a position that has not been seen since May 2022. Unseen areas.”

In terms of catalysts for this week’s price action, Edwards agreed that the recent rush for the U.S. Securities and Exchange Commission’s seemingly late approval of a spot Bitcoin ETF was driving the price increase, but he also cited a number of other near-term factors. factor.

Bitcoin price catalysts.Source: Capriole Investments

Paul Sztorc, founder of LayerTwo Labs, agreed, saying: “I think we are seeing meaningful signs of a broader decoupling between Bitcoin and equities, a divergence that has surprised many market participants.”

With “underlying concerns related to foreign conflicts and rising macroeconomic uncertainty, traders’ expectations had been focused on an impending decline that ultimately did not materialize.” But Stock explained that during the U.S. regional banking crisis, The market experienced “a similar divergence” that resulted in “Bitcoin also outperforming at the time.”

Sztorc believes that the recent divergence in price action is mainly due to “many traders and investors now accumulating funds ahead of the event.”

“I also think the Fed may have to start easing monetary policy soon due to issues with rapidly rising yields. More specifically, traders may be anticipating that the Fed will have to resume some form of yield curve control. The consequence of this loose policy is often currency depreciation.”

CME Bitcoin holdings exceed 100,000 BTC

Further proof that institutional investors are warming to Bitcoin and the idea that a spot BTC ETF will be approved comes from the CME, where BTC open interest hit a new record of over 100,000 BTC. Naked price speculation aside, the takeaway here is that if institutional investors are accumulating spot Bitcoin, then they need to hedge that position, hence the surge in trading volume and open interest on CME Group and elsewhere.