The bitcoin price is smoothly moving upward, fixing above the support level of $10,000. Resistance at $11,000 is currently the key one, which the market expects to break through.
During the trading period from September 8 to 15, the number of long positions in the Asset Manager section has significantly increased (+461 contracts). Total: 717 long contracts versus 12 short positions.
The increase in long positions occurred just at the time when, after several vain attempts to break through the support of $10,000, bitcoin began to rise in price, approaching $11,000.
According to the September 15-22 report, the market situation has changed significantly. The contracts opened for the previous reporting period (September 8-15) have closed. Most likely, this is due to the fact that bitcoin was never able to overcome the price barrier of $11,000.
There are still 12 short contracts in the Asset Manager section. Traders are in no hurry to open short positions, since globally bitcoin is still on an uptrend, going against it is a risky undertaking.
It can be assumed that if BTC breaks through the support of $10,000 and consolidates in the region of $9200- $9700 within 3-4 days, this will be a signal for a fall. Traders will begin to massively open short positions, thereby adding fuel to the price drop.
Although the $10,000 level has held up, the demand for margin positions on Bitfinex continues to decline. The chart below is the daily funding rate of margin traders.
A growing market is characterized by a “rise in cost” of financing, as the demand for long positions increases with the price increase. Now the picture looks exactly the opposite – since the end of July the rate has been decreasing. This indicates a falling demand for longs.
Let’s put the facts together:
• prevalence of long contracts in the Asset Managers section;
• almost zero figure in the short positions section of Asset Managers;
• Bitcoin’s rise from the key support level of $10,000, which signals a continuing uptrend.
We are watching the levels of $10,000 and $11,000, which will determine the further direction of the market movement.