Key points:
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Rising spot and futures volumes show that traders are taking the step back into the crypto market.
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Traders are positioning for an uptrend, but charts suggest swing traders will sell intraday rally tops.
Price motion within the crypto market turned volatile on Tuesday as Bitcoin (BTC) hit an intraday high of $114,000 and Ether (ETH) managed a transient rise to $4,110. Solana's SOL (SOL) also tried to climb above the $200 mark with a fast rise to $198. The breakout rallies, not less than in Bitcoin's case, are in keeping with BTC's rising open interest and suggest that traders are returning to the market after the devastating October 10 sell-off that saw $20 billion in futures liquidations.
Evidence that traders are re-entering the market is data from CoinGlass showing that open interest in Bitcoin futures has risen to over $32 billion from its October 11 low of $28 billion.
Open Interest for Bitcoin Futures. Source: CoinGlass
Hyblock analysts provided a chart showing the move from $107,453 to $114,000, consistent with Bitcoin's four-hour anchored open interest and positive cumulative volume delta for Bitcoin. The breakout rally was also accompanied by a rise within the BTC funding rate, suggesting that the move was driven by futures markets.
The analysts said that if Bitcoin price stabilizes back in a post-selloff range, traders will begin targeting the biggest liquidity zones, a dynamic that played out today as BTC price absorbed top liquidity within the $114,000-$115,000 range.
While the info suggests traders are beginning to get more comfortable with increasing risk, Rakesh Upadhyay, technical analyst at Cointelegraph, said: “Sellers are expected to proceed closing profitable positions at intraday highs,” while bulls are expected to defend the $107,000 support.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
