Bitcoin is in accumulation phase and testing key resistance levels
The current dynamics of Bitcoin (BTC) are causing mixed signals in the market. According to the Coinbase Premium Index indicator, the US exchange is seeing an increase in indicators while the price of the cryptocurrency is falling. This may mean that institutional participants and large traders are accumulating digital coins. The situation is developing in the so-called “zero zone”. Its breakthrough may determine the direction of further price movement.
Financing rates in the positive zone indicate that most market participants are optimistic. However, during previous local drawdowns, the indicator went to negative values, which created good opportunities for purchases. This time, the situation is different: when quotes fall, the market remains bullish. This creates a risk of a short-term correction and increases the likelihood of a “liquidity cleanup.” Therefore, analysts advise caution.
Particular attention is paid to open positions (Open Interest). According to experts, this indicator can be used as a dynamic support or resistance line. When the market grows, OI is below the price and supports the movement. When the market falls, it is higher and restrains the growth. Now it is the 2nd scenario that is observed
If the Bitcoin rate manages to break through this level, the path to the continuation of the upward trend will open. Otherwise, the price may remain under pressure and form a sideways range. In the current conditions, the market is balancing between the accumulation phase and a possible correction.
Thus, the picture looks mixed. On the one hand, institutions continue to accumulate positions, which strengthens the bullish scenario in the long term. On the other hand, high rates and resistance in Open Interest create risks of a short-term decline.
Source: cryptonews.net
