Bitcoin needs this one thing to hit and hold $70K
2024.10.28 13:17
Bitcoin price opened the week with a show of strength by attacking the $69,000 level but should traders expect a push to new all-time highs before the end of today’s trading session?
The $69,000 to $70,000 zone continues to be a resistance cluster, a fact illustrated by the sell walls (red line above BTC price) shown on the chart below.
Similar to most of the recent price breakouts, the Oct. 28 move was driven by futures market activity and liquidations.
Note how the price move from $67,600 to the intra-day range high was accompanied by the ramp-up in the funding rate and buy volume. As has been the case in previous attempts, sellers had their asks filled as the price ran into the sell wall at $69,400.
BTC/USDT 1-hour chart. Source: TRDR.io
As shown in the chart below (red rectangle), futures traders open long positions, which pushes the price higher through high-leverage short positions, hence the bump in open interest and spot volumes as short traders become forced buyers.
BTC/USDT 1-hour chart. Source: Velo.xyz
Bullish traders are essentially trying to trigger enough liquidations to push the price through a breakout level ($69,000 to $71,000), but the spot purchasing demand required to hold the desired range is absent.
The perspective that absent spot volumes are partially responsible for the breakout fade can be inferred from the absence of a spot premium. Traders are buying in the spot market on major dips and pushing BTC higher (or back into range) after major price drops, but this spot purchasing demand evaporates at breakouts to the range highs, hence price peeling back as traders lack the appetitive to overpower sellers.
BTC/USDT 4-hour chart. Source: TradingView
Related: Why is Bitcoin price stuck?
When asked about the current Bitcoin price action, HighStrike head of crypto options and derivatives, JJ, said “Not much has changed from my view since last week. We’re still up against that massive sell wall which suppresses the big breakout to $70K and higher from happening.”
JJ added:
“They’re doing a good job of keeping this price action as a slow burn —thanks in large part to the sell wall preventing any +10% daily moves from happening— it’s just been a methodical clearing of short interest that’s been stuck up here since July. I don’t think we see any sustained moves to ATHs until after the election. Might squeeze there, but it’ll be short-lived. I think we’re on a less-than-week shot clock for this current move to top out if it hasn’t already. The Market will find a reason to de-risk as November gets closer.”
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.
