Market Dynamics and Key Price Levels
Bitcoin (BTC) price has demonstrated resilience, climbing 13% since its liquidation-driven sell-off on October 10. However, technical indicators suggest that sustained daily closes above $116,000 are crucial for confirming a bullish trend reversal.
Data from TRDR indicates that sellers are currently capping intra-day price breakouts above $116,000. Order book data from Binance and Coinbase exchanges reveals significant resistance levels, with a substantial wall of sell orders at $116,000 on Coinbase spot and between $117,000 and $118,000 on Binance perpetual futures.
Futures traders have been observed withdrawing sell orders between $115,000 and $116,000 as the likelihood of a price run towards this resistance increased. This activity coincided with short liquidations exceeding $49.83 million in the preceding 12 hours.
Positive Indicators Amidst Resistance
Despite the challenges in pushing BTC above $116,000, several positive market signals are emerging. Global exchange open interest has rebounded to $31.48 billion from its low of $28.11 billion on October 11. While this represents a recovery, it remains below the $40.39 billion observed when Bitcoin was trading at $124,600.
Spot Bitcoin Exchange-Traded Fund (ETF) inflows are also showing an upward trend. Over the last three trading sessions, net inflows totaled $260.23 million. A particularly strong inflow of $477 million was recorded on October 21, occurring shortly after BTC's price dipped below $108,000.
Investor Behavior and Trading Strategies
Data from Hyblock suggests a divergence in investor behavior. Larger order-size investors, those trading between 1 million and 10 million units, are reportedly selling during price rallies. Conversely, retail investors, characterized by smaller order sizes ranging from 1,000 to 10,000 units, are continuing to buy during price dips.
Currently, Hyblock's aggregate order book bid-ask ratio, set at 10% depth, indicates an ask-heavy order book. Simultaneously, metrics for leveraged retail longs show an increase in short positioning on Binance.
Anticipation of Federal Reserve Decision
From an intra-day trading perspective, some investors may be reducing their risk exposure in anticipation of Wednesday's Federal Open Market Committee (FOMC) meeting, where the US Federal Reserve will announce its decision on interest rates.
While the Federal Reserve is widely expected to implement a 25 basis point cut to its benchmark rate, traders frequently adjust their positions in the cryptocurrency market ahead of such announcements.
Activity in the futures markets suggests that some traders might be preparing for a potential risk-off scenario, which could lead to a decrease in long liquidity and an increase in short positions, potentially triggering downside liquidations.
This anticipated outcome is reflected in the chart below, which shows a cluster of leveraged longs between $112,000 and $113,000 currently undergoing liquidation.
Impact of US-China Trade Negotiations
Beyond the FOMC meeting, a significant risk event is President Trump's scheduled meeting with Chinese President Xi Jinping on Thursday. Any breakdown in these trade talks, or a perception that the resulting trade deal is unfavorable to the US and global markets, could have negative repercussions across both equity and cryptocurrency markets.
Given these impending events, it appears probable that Bitcoin's price will continue to fluctuate between the resistance level of $116,000 and the support level of $110,000 until the FOMC decision and the US-China trade summit outcomes are fully resolved.