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These three reasons explain why traders became optimistic after Bitcoin’s price rose to $ 10,700

September 25, 2020

Today the price is from Bitcoin (BTC) rose sharply 6% from $ 10,136 to $ 10,743.

After this staggering 24 hour run, analysts are becoming cautiously bullish for several reasons Will Bitcoin’s price hit the $ 11,000 mark in the not-too-distant future?

Daily performance of the cryptocurrency market. Source: Coin360

These three reasons explain why traders became optimistic after Bitcoin’s price rose to $ 10,700
These three reasons explain why traders became optimistic after Bitcoin’s price rose to $ 10,700

Daily performance of the cryptocurrency market. Source: Coin360

For now, the factors appear to be boosting investor sentiment negative funding rates, BTC whale activity and the recent weakness of the US dollar.

Funding rates are neutral or negative on most exchanges

Daily chart for the BTC / USD pair

Daily chart for the BTC / USD pair. Source: TradingView.com

For the moment, The Bitcoin funding rate on various futures markets is neutral or negative. although the price is over $ 10,000.

Bitcoin futures exchanges use funds to ensure that the market is balanced and that the majority of the market is preventing it. to keep it from swinging sideways for long periods of time.

If long contracts or traders betting on an increase in the price of bitcoin are the vast majority, then they will have to pay the short contract holders. The opposite is the case when short contract holders dominate the market.

When the funding rate goes negative, it means that most of the market is trading BTC short. If funding rates stay below zero it usually results in a small decrease and increase in the BTC price. It can be a sign that the short bet is crowdedwhich increases the likelihood of a rebound.

A pseudonymous trader known as DonAlt tweeted that it was “strange” to see bearish sentiment with negative funding rates. said::

“It’s very, very strange to see the sentiment so bearish with neutral or negative funding over $ 10,000. I don’t think I can remember a time when this happened before. “

The dealer also noted this sees selling pressure absorption at $ 10,000. Added::

“Now I see an absorption of $ 10,000. It seems like only people are selling in derivatives and I closed my short positions to see how it goes next week.

The overpopulation of short contracts in the Bitcoin market is collapsing Some of the large whales may be pulling their stocks off the exchanges.

Optimistic whale activity

According to Whalemap, a group of on-chain analysts who track the activity of cryptocurrency whales, Bulky buyers moved their BTC on September 23.

A card of unspent HODLer Bitcoin

A card of the unspent Bitcoin from the HODLers. Source:Whale map

Analysts said the top buyers are moving their funds They have been a bullish catalyst for BTC in general. they declared::

“The main buyers moved their currencies yesterday. Based on my personal experience with this metric, we are increasing the top buyers the next day after moving. “

The dollar is weakening

As the number of COVID-19 cases in the US increases, Lawmakers are standing still on the future of a much-needed stimulus package, and this is leading strategists to speculate about a weaker US dollar.

Before the first run Michael van de Poppe, said a full-time trader on the Amsterdam Stock Exchange that $ 10,700 or $ 10,800 for Bitcoin is likely.

The dealers emphasized this If the dollar slows, the $ 11,200-11,400 range could be a reasonable target. Wrote::

“Well, we’re staying here. Everything seems to be designed to test the areas of $ 10,700 to $ 10,800, and maybe even the areas of $ 11,200 to $ 11,400 if the dollar slows a little.”

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