Bitcoin eyes $40k as traders turn bullish
- Bullish positions took bears out of the way, rising to a three-month peak.
- Shorts targeting $35,032 may be liquidated as BTC tries to move past $37,000.
Bitcoin’s [BTC] rise to $36,800 represented that coin’s highest point the price has reached since the year began. As a result, traders were betting against a decline in the BTC price action, data from Santiment revealed.
According to Santiment, the 37% 30-day gain in the Bitcoin value has led to an increase in more long positions than short.
🤑 #Bitcoin, now up +37% in 2 months, has seen its ratio of traders opening #bullish positions (vs. #bearish) hitting 3-month highs. Also, the total open interest on exchanges has ballooned to $7.2B. Ideally, $BTC will continue rising after #FOMO settles. https://t.co/YImIUMGRyl pic.twitter.com/4TyZe5YfFz
— Santiment (@santimentfeed) November 8, 2023
Opening a long position means that a trader expects an asset’s price to increase while he profits from it. A short position is the opposite, indicating a projected price decrease.
The on-chain analysis AMBCrypto coined from Santiment’s data showed that the open bullish positions were the highest in the last three months.
No retreat, no surrender
Like the bullish positions, the Open Interest also jumped to $7.2 billion. Open Interest is the total volume of outstanding futures contracts in the market.
When it increases, it means that more liquidity is being dedicated to an asset. Also, a decrease implies that more positions are being closed.
Alongside the rising price action, the Open Interest hike means there is enough strength to back a continuous uptrend for BTC. The indicator showed that traders were targeting as high as $40,000.
In addition, there is a Fear of Missing Out [FOMO] perception currently existing in the market. FOMO is a psychological sensation where people (investors and traders) make irrational decisions because of the unease that comes with missing out on potential gains.
This was reinforced by the Bitcoin fear and greed index. According to Glassnode, the Bitcoin fear and greed index was 74 at press time. This metric ranges from zero to 100. It also aims to evaluate investors’ sentiment.
Source: Glassnode
When the value is closer to zero, it means there is extreme fear. Conversely, a value closer to 100 means extreme greed. In between these numbers are the neutral values, indicating indecision.
AMBCrypto’s assessment of the Bitcoin fear and greed index depicted high greed (colored green) in the market. Hence, it might not be good to find an entry into the market, as it may have become overheated.
Shorts should be scared
Irrespective of the greed, the liquidation levels, at press time, indicated that a notable plunge may not be near. These levels are typically associated with margin accounts and not spot traders.
By definition, liquidation levels are estimated price levels that could lead to a wipeout of traders’ funds.
Based on HyblockCapitals’ data, our evaluation showed that short positions with high leverage, and targeting $35,032 may be at risk of a forced position close.
Source: HyblockCapital
As per the BTC/USD 4-hour chart, there seems to be no stopping Bitcoin’s rise to $40,000. This inference was reinforced by the Awesome Oscillator (AO).
At press time, the AO had jumped to 971.28, indicating that the short-term Moving Average was greater than the longer period.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
The increasing green bars of the AO also signify how buyers were in total control of the market. Thus, it may be difficult for Bitcoin bears to make any significant gain. Furthermore, the 0.236 Fibonacci retracement level showed that BTC may correct to $35,542.
However, the $0.382 Fib level showed that there was strong support near $35.275. If the support holds and buying pressure increases, Bitcoin’s price may surpass $37,000 and the ride to $40,000 may be all but settled.
Source: TradingView
