Bitcoin jumped to nearly $26,000 during the Asian trading hours on Tuesday, reversing Monday's decline to three-month lows under $25,000. The move could be best described as a short squeeze – a rally powered by an unwinding of bearish derivative bets. As prices jumped, cumulative open interest in futures and perpetual swaps trading on Binance, Bybit, OKX and Deribit fell from $5.05 billion to $4.8 billion.
Open interest refers to the dollar value locked in the number of active or open positions. Bitcoin’s weakness has dragged several altcoins lower, with many testing multi-week lows. This indicates that the broader crypto market is in a firm bear grip. Negative markets make it difficult for buyers to identify short-term bullish trades as rallies hardly sustain. However, it could be a good time for long-term investors to build a portfolio.
Bitcoin has been trading near the $26,000 level for the past few days, indicating a tussle between the bulls and the bears. The down sloping moving averages indicate advantage to bears but the positive divergence on the relative strength index suggests that the selling pressure is reducing. The indicators are not giving a clear advantage either to the bulls or the bears. Therefore, it is better to wait for the price to either sustain above $26,500 or dive below $24,800 before placing large bets. If bulls overcome the obstacle at $26,500, the BTC/USDT pair could soar to the overhead resistance at $28,143.
On the other hand, a fall below $24,800 could clear the path for a collapse to $20,000. On the upside, a rally above $26,500 will indicate that the advantage has tilted in favor of the buyers. That may start an up-move to $27,600 and eventually to $28,143. Alternatively, if the price breaks below $25,300, the selling could pick up and the pair may retest the Aug. 17 intraday low of $25,166.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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