Key points:
Bitcoin traders’ ability to overcome price resistance at $116,000 could hinge on Wednesday’s Fed decision on interest rates and this week’s US-China trade summit.
Pro traders are distributing into BTC price rallies while retail-sized investors are buying the dips in spot, and also being liquidated in futures.
Bitcoin (BTC) price continues to show strength, rising 13% since its historic liquidation-driven sell-off on Oct. 10, but technical charts indicate that daily closes above $116,000 are needed to lock in the bullish trend reversal.
Data from TRDR shows sellers capping the most recent intra-day breakouts above $116,000, and order book data at Binance and Coinbase exchanges highlight another wall of asks at $116,000 (Coinbase spot) and $117,000 to $118,000 (Binance perps).
As shown in the order book chart in the lower left-hand side, futures traders pulled their asks at $115,000 to $116,000 as the chance for a run on the resistance increased, and short liquidations topped $49.83 million in the past 12 hours.
While bulls are struggling to push BTC over $116,000, a few positives shine through the data. Global exchange open interest has recovered to $31.48 billion from its Oct. 11 low of $28.11 billion, but it is still quite a distance from the $40.39 billion seen when Bitcoin traded for $124,600.
Spot Bitcoin ETF inflows are also on the upswing, with $260.23 million in net flows over the last three trading sessions, and a notable $477 million inflow on Oct. 21, which was a few days after BTC price fell below $108,000.
Data from Hyblock shows larger order-size investors (1 million to 10 million) continuing to sell the rips as retail investors (smaller order-size, 1,000 to 10,000) have bought the dips.
Currently, Hyblock’s aggregate orderbook bid-ask ratio (set to 10% depth) shows an ask-heavy orderbook, while the true retail longs and shorts accounts metric shows short positioning rising at Binance.
From an intra-day trading point of view, some investors could be reducing risk exposure ahead of Wednesday’s FOMC, where the US Federal Reserve will announce its decision on interest rates.
While the Fed is expected to cut its benchmark rate by 25 basis points, traders adjusting their positioning ahead of the announcement have become a regular occurrence in the crypto market.
Related: Bitcoin price taps $116K as analysis weighs odds of CME gap fill
Activity in the futures markets perhaps shows some traders anticipating perps risking off and the ensuing drop in long liquidity, or conversely, the increase in shorts deployed as an opportunity to trigger liquidations on the downside.
Such an outcome can be seen in the chart below, where a cluster of leveraged longs at $112,000 to $113,000 is currently being liquidated.
While Wednesday’s FOMC is expected to generate a bullish outcome, an overarching risk event is US President Donald Trump’s Thursday meeting with Chinese President Xi Jinping. If talks break down for some reason, or the market doesn’t perceive the resulting trade deal to be favorable to the US and global markets, negative reverberations could be felt across equities and crypto.
Until this week’s FOMC and US-China trade deal is resolved, it seems likely that Bitcoin price will continue to bounce between resistance at $116,000 and support at $110,000.
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.