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Over the last week, Bitcoin’s price has struggled to break through $58k. It recently managed to breach levels around $57.6k, but failed to advance any further. Despite the price chart’s stagnancy, market participants’ overall bullish sentiment has remained unchanged.
Outlining the derivative market’s trends
The futures open interest has consistently increased since the beginning of this month. In fact, the current OI levels are quite congruent to previous ‘squeeze’ phases that were noted in May and more recently in September, 2021. As depicted in the chart attached, the OI has registered a 45% uptick when compared to its September lows, and has been hovering around $18 billion of late.
Thus, at this stage, it can be asserted the the speculative interest is on the rise.
Paralelly, the 3-month annualized futures basis has also been treading northwards. The latter May- June stretch was notably a bearish period and at that time, the premium remained in range-bound in the 2%-5% range. Even towards the end of September, the same was back to its 5% low and evidently, the bearish sentiment intensified. However, this metric has rallied up to 14.1% in just the last 7 days, indicating the change in the broader sentiment.
The bullishness was further evidenced by the state of the funding rate. The same has remained ‘moderately’ positive [0.01% to 0.02%] for most part of last week across all exchanges. This suggests that long traders have been playing safe amidst the rise in volatility.
The chart above clearly highlights how the volatility has swiftly rebounded from its September lows. The same sort of assures that the asset’s price wouldn’t remain stagnant in the current range for long.
Volatility, just like leverage, is a double-edged sword and can cause dramatic price movements in either direction. Nonetheless, owing to the cautiousness exhibited by traders this time around, high-leverage/volatility induced liquidations wouldn’t cause any major dent.
Odds of breaching $64k
Aside from the overall bullish sentiment, Bitcoin’s fundamentals have been improving. The current transfer volume levels, as a percentage of realised capital, are very similar to those seen during previous bull market phases.
Transfer volumes greater than 3% of the realised cap usually signal the start of an uptrend. Glassnode’s data clearly shows that it has surpassed the aforementioned threshold, indicating growing demand for on-chain value settlement.
By and large, the datasets above have painted a bullish picture and it fairly seems that Bitcoin is out of the woods. So, if all trends head in the same direction, then, attaining $64k in the coming fortnight would be almost inevitable.