Bitcoin Consolidates After Wall Street Open
Bitcoin (BTC) is currently consolidating near $34,000 following a 15% daily gain. The cryptocurrency reached a 17-month high of $35,200 due to excitement over the potential approval of a Bitcoin spot price exchange-traded fund (ETF) in the United States. Material Indicators, a monitoring resource, analyzed the sequence of events leading to the $5,000 daily candle and noted a support/resistance (R/S) flip at $30,600. The market broke through resistance levels that were expected to provide more resistance. This breakout was facilitated by an $87 million buy wall at $30.6k. With bid liquidity now pulled from below, there may be an opportunity for a potential retrace.
Opinions on Bitcoin Funding Rates Diverge
The funding rates across exchanges are deep inside positive territory, indicating that the majority of traders are longing Bitcoin. However, popular trader CryptoBullet warns that this is not necessarily a good sign as the majority is often wrong. The market maker may need to wipe out these late longs before the market can continue its upward movement. BTC short liquidations on the way up amounted to $161 million and $48 million for Oct. 23 and 24 respectively, according to CoinGlass data. Fellow trader Daan Crypto Trades believes that positive funding rates are common during bull markets and may not necessarily indicate a reversal.
Dollar Rebounds as BTC Consolidates
The U.S. dollar index (DXY) has rebounded by 0.5% after reaching its intraday low of 106. Bitcoin’s reaction to DXY movements has been mixed lately, despite the previous inverse correlation between the two assets. Popular macro analyst James Stanley suggests that the upcoming release of PCE data on Oct. 26 will be a major determining factor for the short-term movement of the DXY. The defense of the low at 104.70 from the last FOMC meeting will be crucial for bullish sentiment in the dollar.
Hot Take: Bitcoin Consolidation and Funding Rates
Bitcoin is currently consolidating near $34,000 after a significant daily gain. The market broke through resistance levels and there may be an opportunity for a potential retrace. However, funding rates across exchanges are deep inside positive territory, which may indicate that the majority of traders are longing Bitcoin. This could lead to a market maker needing to wipe out late longs before the market can continue its upward movement. Additionally, the U.S. dollar has rebounded while Bitcoin consolidates, and upcoming PCE data will be important for the short-term movement of the dollar.
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