Bitcoin Losing Momentum, Poised to Retest Previous Levels

Bitcoin is losing momentum on lower timeframes as the price is rejected from $20,000 and seems poised to retest previous support levels.

Bitcoin is losing steam as the price is rejected from the $20,000 level and seems poised to re-test previous support levels. The cryptocurrency enjoyed a short-lived bullish price action, but buyers have been unable to push further.

Looking at the current market conditions, it seems that Bitcoin is still maintaining its position as the top cryptocurrency despite some losses in the past week. However, it is important to keep an eye on the other coins in the top 10 by market cap as they may start to show some more significant losses in the near future.

BTC’s price moving sideways on the daily chart. Source: BTCUSDT Tradingview
It seems that BTC's price is stagnating on the daily chart. This could be due to a number of factors, including market saturation or simply a lull in trading activity. However, it's important to keep an eye on BTC's price movements, as even small changes could indicate larger trends in the market.

Open interest in Bitcoin is following the price, what are the implications?

The Bitcoin price is currently in a bullish momentum, with participants in the derivatives sector following suit. Late September and early October saw BTC's price breaching resistance at $20,500, with the Open Interest (OI) for future contracts trended upwards in response. This positive price action is a good sign for the future of Bitcoin, and we could see further price increases in the months to come.

The recent price action in the markets has been bearsish, with OI spiking and then quickly plummeting. This is seen as a sign that traders are taking on too much leverage and chasing the momentum, rather than following a sustainable plan.

I believe that the large players using the liquidity served by leverage positions is a positive sign for Bitcoin's price in the long term. These players are able to push the price in the opposite direction in the short term, but I believe that their actions will lead to large rallies in the future.

There is no doubt that the Bitcoin price is on the rise, with many experts predicting even more growth in the future. This recent surge in interest and price is a sure sign that the market is healthy and growing. With more and more people investing in Bitcoin, it is clear that this cryptocurrency is here to stay.

The analyst added the following on the chart below and Open Interest: The addition of this data could help to provide a more complete picture of market activity and sentiment.

I’m not saying we’ll get a similar move as per the highlighted area on the chart from 2020. I’m simply showing how an increase in Open Interest does not have to mean a full retrace every time. It’s true that this did happen while we were in this current range.
Source: @DaanCrypto via Twitter
I envision a future in which cryptocurrencies are widely accepted and used as a mainstream form of payment. In this future, businesses and individuals alike will be able to easily and securely send and receive payments in cryptocurrencies. This will help to create a more efficient and global economy, and will provide people with more choice and flexibility in how they use and store their money.

What Could Tip Off A Large Bitcoin Upside Move?

The analyst's prediction is that if there is a sudden increase or decrease in the number of open orders (known as Open Interest) along with bids or sell orders in the spot sector, this could provide more clues into potential persistent trends. In 2022, the price of Bitcoin crashed from its previous all-time high, and this downside pressure has been supported by spot selling.

Analysts at Arcane Research believe that Bitcoin could be set for a massive upside trend in the near future, as increased Open Interest and spot selling activity points to a potential price reversal. If this trend plays out, it could mean big gains for Bitcoin investors in the months ahead.

(…) as long as spot bid (spot selling) stays steady (Very important), then I don’t see an immediate danger for these positions. If price starts trading lower then that’s where you pay attention.
Source: Arcane Research
According to Arcane Research, the cryptocurrency market is on the verge of a major breakout.