Bitcoin (BTC) has been caught in a period of sideways trading over the past several days and weeks, as it has been unable to garner any significant and sustainable upwards momentum in spite of the strong support that it has established at $8,700.
Bitcoin’s open interest, however, may point to an underlying strength for the cryptocurrency, and according to one analyst could signal that someone is about to “light a match to some rocket fuel” that could send BTC’s price surging higher in the near-term.
Bitcoin Consolidates Around $8,700 as Bulls Fail to Spark Upwards Momentum
At the time of writing, Bitcoin is trading down 1% at its current price of $8,710, which marks a slight decline from its daily lows of over $8,800 that were set yesterday.
Despite the lackluster price action currently seen by BTC, it is important to note that $8,700 has consistently proven to be a strong region of support for the cryptocurrency, and it is unlikely that this level will be broken below unless bears garner some sort of significant momentum.
As for where Bitcoin’s near-term resistance lies, it has been rejected on multiple occasions over the past couple of weeks within the lower-$9,000 region, which signals that sellers are firmly in control of this price region for the time being.
Does BTC’s Open Interest Signal That Bull Run is Inbound?
In spite of the lack of buying pressure currently seen by Bitcoin, it is important to note that BTC’s open interest is currently point to some underlying bullishness.
Mr. Anderson, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, noting that a big movement is imminent for the cryptocurrency.
“$BTC Open Interest: Don’t fall asleep and Don’t blink! Open Interest tells me that someone will light a match to some Rocket Fuel soon. Liquidations are coming soon,” he explained while pointing to the chart seen below.
$BTC Open Interest
Don't fall asleep and Don't blink!
Open Interest tells me that someone will light a match to some Rocket Fuel soon.
Liquidations are coming soon pic.twitter.com/iEhaE9eUfj
— Mr. Anderson (@TrueCrypto28) November 14, 2019
Cantering Clark, another popular analyst, further elaborated upon this notion, telling his followers that aggressive bulls have been buying each price dip, which means that the crypto’s local support could be stronger than it is widely thought to be.
“1/1- I get the impression that much of this open interest increase is attributed to aggressive bulls, it would seem as though they are buying every dip. Premium supports that thesis. If that be the case I doubt our local support is more than butter. $BTC,” he said while referencing the chart seen within the below tweet.
https://twitter.com/CanteringClark/status/1194954890998669313
Assuming that Bitcoin continues holding strong above $8,700, it is reasonable to assume that bulls will soon flex their strength and send the crypto flying past its near-term resistance regions.
Featured image from Shutterstock.
