Over the past hour, Bitcoin (BTC) has surpassed $ 11,000 on major exchanges, including Coinbase and Binance. This came after almost two weeks of low volatility as the cryptocurrency market remained weak and the bitcoin price stabilized below several levels of resistance.
Unlike previous highs when ETH (ETH) led the Bitcoin rally, only BTC rose higher, while other large cryptocurrencies remain in the red. Decentralized Finance (DeFi) tokens, which surpassed BTC during August, have been ineffective in recent days.
Negative financing rates
Bitcoin’s recent uptrend has much more messy patterns compared to previous uptrends. BTC has grown on its own in the last 3 days, accompanied by a negative financing rate.
Financing is the mechanism that bitcoin futures exchanges use to balance the market. If the majority of market participants bet on the price of an asset by card sale, the holders of the card contracts must compensate the owners of the long-term agreements. The opposite of this process applies when traders use an asset for an extended period of time.
Bitcoin financing rates on Skew show that financing rates are still mostly negative on the major stock exchanges, indicating that traders continue to sell BTC despite their bullish move.
The data indicate three possible trends: short positions are declining, the spot market is leading, or futures contracts have minimal impact on the BTC price.
According to TradeLayer founder Patrick Duggan, BitMEX is lagging behind in liquidity compared to March levels. Open interest in futures exchanges has declined in recent weeks, indicating a decline in futures activity.
Various data also indicate that the spot market is leading the current rally. If demand in the spot market lags after the rally, it is considered an optimistic trend.
When the futures market causes BTC to rise, it often leaves the market vulnerable to prolonged pressure. However, if the spot market pushes BTC higher, the chance of significant sustained pressure causing a massive correction is small.
$ 11,000 is still a resistance level
However, it is too early to expect a long-term increase of $ 11,000. Dealers have identified the $ 11,000-11,300 area as the main area of resistance. There is a high probability that a rejection will occur, and the most important support levels will remain at $ 10,100 and $ 10,500.
On September 15, Michael Van de Pope, a resident trader at the Amsterdam Stock Exchange, announced that a $ 10,900 break could potentially lead to $ 11,300. He said:
“Levels to watch out for $ BTC. After that, a break of $ 10,900 -> $ 11,300. Loss of $ 10,600 -> $ 10,300 after that. ”
However, it is difficult to expect a significant increase in BTC above $ 11,300 based on recent results. After falling sharply from $ 12,500, the $ 11,300 level solidified as resistance.
Federal Reserve Board meeting
Bitcoin’s rally also coincided with a recovery in gold and an intraday rally in the US stock market. Simultaneous up-potential arises when the Federal Reserve meets to report on interest rates.