Key points:
Rising spot and futures volumes show traders venturing back into the crypto market.
Traders are positioning for upside, but charts hint that swing traders will sell intra-day rally tops.
Crypto market price action turned volatile on Tuesday as Bitcoin (BTC) hit a daily high at $114,000, and Ether (ETH) managed a brief push to $4,110. Solana’s SOL (SOL) also attempted to move above the $200 level with a quick rally to $198. The breakout rallies, at least in Bitcoin’s case, line up with BTC’s rising open interest and suggest that traders are returning to the market after the devastating Oct. 10 sell-off, which saw $20 billion in futures liquidations.
Proof of traders rejoining the market can be seen in data from CoinGlass that shows Bitcoin futures open interest rising above $32 billion from its Oct. 11 low at $28 billion.
Hyblock analysts provided a chart showing the rally to $114,000 from $107,453, lining up with Bitcoin’s four-hour anchored open interest and cumulative volume delta turning positive. The breakout rally was also accompanied by an uptick in BTC’s funding rate, suggesting that the move was driven by futures markets.
The analysts said that as Bitcoin price re-establishes itself into a post-sell-off range, traders will begin to target the largest liquidity zones, a dynamic that played out today as BTC price absorbed topside liquidity in the $114,000 to $115,000 range.
Related: Price predictions 10/20: SPX, DXY, BTC, ETH, BNB, XRP, SOL, DOGE, ADA, HYPE
While the data suggests that traders are beginning to become more comfortable with adding risk, Cointelegraph technical analyst Rakesh Upadhyay said, “sellers are expected to continue closing profitable positions at intra-day range highs,” while bulls are expected to defend the $107,000 support.
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.