Bitcoin is bouncing around, trying to break past its all-time high of $112,000. While it’s shown strong upward momentum, it keeps hitting a wall. Let’s dive into what’s happening.
Macroeconomic Factors at Play
Recent positive news, like the passing of a major US bill and better-than-expected job numbers, has boosted investor confidence and risk appetite, generally good for Bitcoin.
The 90-Day Open Interest Dip: A Bullish Signal?
Looking at Bitcoin’s derivatives market, a key indicator – the 90-day change in open interest (OI) – has turned negative. Historically, this signals a market “shakeout,” where heavily leveraged traders are forced to sell, leading to a price drop and a healthier market. This often creates good buying opportunities. Experts believe this dip could be a setup for a big move upwards.
Bitcoin’s Price Action: A Tight Range
Bitcoin’s price is currently stuck between $108,000 and $109,300. While it’s still above key support levels, indicating a bullish trend, the lack of a decisive breakout is keeping things tense. A break above $109,300 could signal a significant price increase, while a drop below $106,000 might lead to a correction.
Dollar-Cost Averaging (DCA) Opportunity?
Many believe this period of consolidation, following the negative 90-day OI change, presents a prime opportunity for dollar-cost averaging (DCA) – gradually buying Bitcoin over time to reduce risk. The market shakeout is seen as having cleared out weaker players, leaving the field to more serious investors.
What’s Next for Bitcoin?
The coming days are crucial. Will Bitcoin finally break through the $112,000 resistance, or will we see a price correction? The market is poised for a significant move, and traders are on high alert. For now, the overall momentum seems positive, but confirmation is needed.