- Technical Indicators and RSI
- Open Interest and Negative Funding Rates
- Traders' Reaction and Potential Outcomes
Several popular Bitcoin trading metrics are flashing positive, which may force traders to act quickly and cover their positions if macroeconomic events align, according to a crypto analyst.
Technical Indicators and RSI
One of the key metrics that caught Markus Thielen's eye, head of research at 10x Research, as a sign of improvement is Bitcoin’s relative strength index (RSI) “bottoming out” — which measures the speed and change of its price movements to identify overbought or oversold conditions. Bitcoin’s RSI score is currently 61.13 out of a total possible score of 100 and is down 8% since July 21, according to Bitbo data.
Open Interest and Negative Funding Rates
Thielen told Cointelegraph that the increase in Bitcoin Open Interest (OI) — the total number of Bitcoin futures contracts that have yet to be settled or expire — while the “market went down” on Aug. 5 indicates “more short positioning,” which is also indicated by the negative funding rate. OI is up 13.62% since Aug. 6, the day after Bitcoin fell to $49,842, its first drop below $50,000 since February, per CoinGlass data.
Traders' Reaction and Potential Outcomes
More future traders are appearing more optimistic about a Bitcoin price upswing from its current price of $59,391. The put-to-call volume ratio, measuring the demand for sell versus buy options, stands at 66.33% calls and 33.67% puts, resulting in a put-to-call ratio of 0.51. “A massive Bitcoin short squeeze will be inevitable,” pseudonymous crypto trader Mister Crypto said.
He believes the market is at a tipping point, highly anticipating the United States Federal Reserve’s decision on whether to cut interest rates. “Such a message could trigger a rally in the stock market, with Bitcoin likely following suit,” he declared.
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