The price of Bitcoin maintains its upward momentum from the day before. Today it surpassed the $27,000 threshold, a level not seen since August 31. Notably, BTC recorded its first green weekly closing candle in five weeks yesterday. At press time, Bitcoin price had reached an intraday high of $27,267.
Why is the price of Bitcoin increasing today?
A major indicator that has caught the attention of analysts is the rapid increase in open interest. DaanCrypto, a prominent figure in the crypto space, commented on Bitcoin open interest: “Bitcoin open interest has been rising like crazy in the last few hours. Up to +850 million dollars in hours. He said this could pose a problem if the spot supply disappears, which could lead to a full retracement similar to before.
“This would then be due to underwater positions entered near the summit. If the spot supply remains, then these positions are obviously good. Open interest has now returned to grayscale pump levels,” Daan said, further noting the resilience of the spot premium at present, “long positions are comfortable as long as a spot bid is present “.
Maartuun, community manager at CryptoQuant Netherlands, also highlights the rapid rise in open interest: “Fasten your seat belts. The Open Interest goes crazy during this escape attempt. It increased by $600 million (7%).
Interestingly, Coinglass data reveals that at press time, BTC short-term liquidations remain modest, with around $20 million in short sales liquidated. As of press time, IO has skyrocketed again, up almost $1 billion ($11.04 billion to $12.03 billion).
Renowned analyst @52kskew underlines trading behavior on Binance: “The majority are chasing shorts aggressively from what I have seen so far. Binance Open Interest: Binance perp OI starts to rise to the moon again with minimal price difference ~ a big move is brewing. Rising OI and insignificant change in delta perp (positions opening on price). Takers continue to sell aggressively on price, bulls want to see a consistent limit on supply here. Pivotal price of $26.7K for management.
Ali Martinez, another analyst, sharp to Bitcoin’s 3-day chart and noted a buy signal from TD Sequential yesterday. “An increase in $BTC buying pressure could drive prices towards the middle or upper boundary of the channel – targeting $28,000 or $31,000. However, watch the TD risk line at $24,500. This is the key point of invalidation.
From a macro perspective, renowned analyst Ted (@tedtalksmacro) noted a correlation between USD liquidity and Bitcoin price movements: “If you can track/predict USD liquidity, you will have a good idea of where the price is going. » He then pointed out a divergence between the increase in USD liquidity and the previous stagnation of BTC, highlighting the recent change which could be due to the return of liquidity.
Monthly closing will be crucial
As NewsBTC reported, September is historically one of the worst months of the year for the price of Bitcoin. However, this year could be different if BTC continues its trend of the past few days.
Rekt Capital Underlines the potential importance of the next monthly close candle for Bitcoin in a recent tweet, stating: “The next monthly close candle will be crucial. » According to the analyst, Bitcoin often produces long ascending wicks when it turns old monthly supports into new resistances.
Simply put, an ascending wick on a candlestick chart indicates price levels at which Bitcoin has traded during a period but has not closed. A long wick suggests a strong rejection of these higher price levels. This could mean that while buyers tried to push the price up during the month, by the close, sellers had driven it down, leaving a long “wick” on the candlestick.
Rekt Capital suggests that these wicks can extend up to +8% beyond the body of the candle. The analyst notes that if the monthly close of the candle produces a +7% bullish wick beyond the level around $27,100, it could mean the price could break out above the lower weekly high.
This could be a positive sign if the monthly close remains above $27,100, indicating that it is a support level. However, if the price closes the month below $27,100 after reaching higher levels, it could confirm $27,100 as new resistance, hinting that the recent price movement could be just a temporary rally at the rise.
At press time, BTC stood at $27,241.
Featured image from iStock, chart from TradingView.com