Bitcoin derivatives data reflects traders' belief that $20,000 will become support
Falling interest in margin shorts and a balanced perception of risk in options markets highlight a possible path to $21,500 for BTC price.
Market analysis
Bitcoin (BTC) showed strength on October 4-5, posting a 5% gain on October 5 and breaking through the $20,000 resistance. This move liquidated $75 million in leveraged (bearish) short positions and led some traders to predict a potential rally to $28,000.
$BTC #Bitcoin
Shared this descending channel 2 days ago. $BTC managed to break through the middle line. Next target = Upper channel trendline = ~21.5k.
In the event of a breakout, 28k-30k are possible. pic.twitter.com/dyqMLdcXZ4
— ⓗ (@el_crypto_prof) October 4, 2022As described by Mustache, the descending channel continues to exert pressure, but there may be enough strength to test the upper channel trendline at $21,500. The price move coincided with improving conditions in global equity markets on October 4, with the S&P 500 index gaining 3.1% and the tech-heavy Nasdaq Composite up 3.3%.
Curiously, the improvement in sentiment came as U.S. job postings fell by 1.1 million in August, according to the U.S. Department of Labor. The drop was the largest since April 2020 and signaled that the US Federal Reserve's aggressive contractual monetary policy may end sooner than expected.
General bullish sentiment may have caused Bitcoin to break through the $20,000 resistance, but that doesn't mean professional investors are comfortable at current price levels.
Margin traders did not increase their long positions despite the rallyMargin and options market monitoring provides excellent insight into the positioning of professional traders. Margin trading allows investors to borrow cryptocurrency to leverage their trading position. For example, one can increase exposure by borrowing st...
Falling interest in margin shorts and a balanced perception of risk in options markets highlight a possible path to $21,500 for BTC price.
Market analysis
Bitcoin (BTC) showed strength on October 4-5, posting a 5% gain on October 5 and breaking through the $20,000 resistance. This move liquidated $75 million in leveraged (bearish) short positions and led some traders to predict a potential rally to $28,000.
$BTC #Bitcoin
Shared this descending channel 2 days ago. $BTC managed to break through the middle line. Next target = Upper channel trendline = ~21.5k.
In the event of a breakout, 28k-30k are possible. pic.twitter.com/dyqMLdcXZ4
— ⓗ (@el_crypto_prof) October 4, 2022As described by Mustache, the descending channel continues to exert pressure, but there may be enough strength to test the upper channel trendline at $21,500. The price move coincided with improving conditions in global equity markets on October 4, with the S&P 500 index gaining 3.1% and the tech-heavy Nasdaq Composite up 3.3%.
Curiously, the improvement in sentiment came as U.S. job postings fell by 1.1 million in August, according to the U.S. Department of Labor. The drop was the largest since April 2020 and signaled that the US Federal Reserve's aggressive contractual monetary policy may end sooner than expected.
General bullish sentiment may have caused Bitcoin to break through the $20,000 resistance, but that doesn't mean professional investors are comfortable at current price levels.
Margin traders did not increase their long positions despite the rallyMargin and options market monitoring provides excellent insight into the positioning of professional traders. Margin trading allows investors to borrow cryptocurrency to leverage their trading position. For example, one can increase exposure by borrowing st...
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