Bitcoin is trading above $57k at the time of writing after a small correction that sent prices as low as $56k. Although there was not much volatility, the ongoing bullish feat received mixed reactions from traders, with many being skeptical about the next price actions.
One reason for the skepticism is that many cannot find the catalyst behind the latest price hikes. Due to this, they call it baseless and speculate it’ll end soon. Others expressed optimism, calling it the start of the long-awaited bull run.
While both speculations are not far-fetched, it is worth noting that US crypto traders are significantly positive and are stocking up on the apex coin. As a result, the Coinbase premium is green as funds return to the crypto market after several days of bearish actions.
One trigger for the sudden change in traders’ behavior is the anticipation of an interest rate cut in the coming week. It fueled not only the crypto market but traditional stocks as they are recovering from the massive losses they incurred a few days ago. BTC price correlation with such assets also plays a major role in this regard.
The US elections will undoubtedly affect the price of BTC. As a result, activities related to the upcoming elections will also affect prices. One major event most traders are looking forward to is the upcoming debate between the two frontrunners in the race. They’ll highlight ways their policies will affect the crypto market.
Additionally, bitcoin products are seeing significant inflow, ending eight days of consistent outflows. Many also call the improved outlook for inflation another major factor in the latest uptrend.
Why BTC Can’t Surge Above $58k
With positive fundamentals, the inability to surge above this key level is uncanny. However, derivatives may be the reason for the most recent trend. Although the market is seeing notable funding and more open interest, most of it goes to shorting bitcoin.
This means that more traders are willing to buy the apex coin at a lower price. The taker-buy-sell ratio shows that the bears are edging, as such orders were filled in the last 24 hours. Most of the short positions are above $57k, which explains the asset’s current trend.
The question of when it’ll end is one only time will answer. Nonetheless, there are telling signs. One such is that long traders are funding their positions in anticipation of a massive increase.
The debate tonight may offer the trigger for the bullish traders.
The spot market is also seeing its fair share of bullish activities as several indicators are positive. For example, the exchange reserves are depleting, indicating notable buying pressure. However, most of the pressure is coming from the US.
The Asian market is yet to resume buying as the Korea premium is still negative. Additionally, ETFs are seeing low funds amidst the small inflow. Nonetheless, the exchange netflow indicates that the apex coin is gearing up for a major price change.
On-chain indicators also suggest that miners are moderately selling, resulting in small price swings.
What will Bitcoin do?
Indicators on the 1-day chart suggest that the apex coin is gearing up for a major push above $58k. For example, the moving average convergence divergence is currently printing buy signals. The 12-day EMA is edging closer to intercepting the 26-day EMA in the ongoing bullish convergence.
It is worth noting that the pivot point lies at $58k, which means that a decisive flip will offer the bulls a level with significant demand concentration. BTC may retest $60k before the week runs out.
Nonetheless, the apex coin may continue bouncing off the 50% Fibonacci retracement level at $56,500.
Elendu Benedict | September 4, 2024
