Bitcoin (BTC) has made a significant move, reaching $37,000 for the first time in 18 months. However, traders are expressing suspicion about the price action of BTC.
After experiencing overnight gains, Bitcoin is making an attempt to break through resistance levels on its way to reaching the $40,000 mark. Data from Cointelegraph Markets Pro and TradingView indicates that BTC/USD is on the verge of hitting $37,000 after initially surpassing this mark prior to the opening of Wall Street. This month, Bitcoin has already gone up by 6.6%, which has surprised some market participants with its strength, following a nearly 30% gain in October.
Some traders are wary about Bitcoin’s trading volume. Although the price has been rising quickly, the support in terms of strong volume is not present at current levels. Material Indicators expressed concern about this situation, highlighting that support is anchored by new plunge protection at $33,000, and resistance at $40,000 has increased to the $42,000 range. The organization also suggested that the current price appreciation is happening on declining volume, which typically does not end well, signaling a potential red flag.
Another trader, Skew, revealed that whale selling has been happening toward the $40,000 level, indicating that $38,000 to $40,000 could be where these sellers leave the market.
Furthermore, open interest (OI) in Bitcoin futures has been increasing, which forms the foundation of the recent upside moves in Bitcoin. Total Bitcoin futures OI has reached more than $17 billion, the highest value since mid-April. Financial commentator Tedtalksmacro pointed out that during a bear market, the market tends to fade these OI impulses, leading to a ranging environment. However, he suggests that it could be considered a full bull market when the market trends higher on higher OI, indicating that this is something to keep an eye on.
Amidst all this news, it’s important to note that this article does not contain investment advice or recommendations, and every investment and trading move carries risk, so conducting thorough research is essential before making any decisions.
In summary, while Bitcoin is making significant gains and attempting to break through resistance levels, concerns about the trading volume and open interest are causing some traders to be wary about the current BTC price action. The cryptocurrency market remains unpredictable, so it is important for traders and investors to stay cautious and conduct thorough research before making any investment decisions.