Bitcoin (BTC) has increased 3% in the past 24 hours, from $ 10,322 to $ 10,680. But BTC is still facing significant resistance around $ 11,000 and has had low volatility since September 3rd.
Declining open interest in the futures market and stagnant spot market size increase the likelihood of lower volatility.
Low volume, low open interest rates and great bitcoin resistance from now on
Technically, Bitcoin is in a position to rise above the critical $ 10,570 level, which was previously a resistance area. However, resistance ranging from $ 11,000 to $ 11,288 acts as a barrier to an explosive impact.
The combination of a lack of open interest and volume, along with a significant resistance level of $ 11,000, could keep Bitcoin’s volatility low for a longer period.
The total open interest rate in the Bitcoin futures market decreased from $ 5.7 billion to $ 3.8 billion last month. The divergence data shows that open interest, which applies to all long and short positions in the market, has ceased.
Bitcoin spot size shows a similar trend. Bitcoin spot volume remained below $ 500 million for most of the past month.
Bitcoin has seen a small flash of over $ 10,500 in bitcoins, which is generally encouraging among traders. However, given the aforementioned resistance, it might be too early to predict a major price move in the short term.
If BTC returns the site between $ 10,500 and $ 10600 in support, the likelihood of creating a new site increases from $ 10,500 to $ 11,000.
Historically, BTC has had longer periods of accumulation and consolidation after a big spike. The consolidation phase neutralizes the futures and options markets and strengthens the basis for the next rally.
What do merchants say?
Meanwhile, a trader under a pseudonym “Crypto Monk” said that Bitcoin’s weekly chart is showing a neutral trend.
Trader described Bitcoin’s stability at $ 10,000 and short term resistance at $ 11,000. he wrote:
Bitcoin ended the week in a neutral light. Still, it’s not the best place to start short selling and turning into a bear. Expect another $ 11,000 test. ”
Crypto derivatives trader Cantering Clarke said BTC has succeeded in reclaiming a historically significant area as support. Clark notes:
“Hit yourself if you sell after a 20% drop from the highs before the first test of one of the most important support and resistance reversals we’ve seen in years. Context is everything.”
Not everyone is on the fence
However, the variable that could trigger short-term volatility is the upcoming Federal Reserve meeting. Strategists don’t expect a backlash even with positive economic data and the recently announced adjusted inflation target of at least 2%.
The market is heading in a downtrend after upbeat labor market reports as investors fear that the Fed will tighten economic conditions. The Fed is likely to maintain a calm economic environment this time, which is likely to benefit both stocks and bitcoin.
PlanB, the creator of the nickname for the Stock-to-Flow Ratio (S2F) indicator, believes Bitcoin is on the brink of a huge rally if the S2F model continues to follow its historical pattern.