The benchmark cryptocurrency slipped by up to 4.56 percent to an intraday low of $25,833. Nevertheless, attempts to extend the bearish momentum faltered due to a comparatively stronger buying pressure near the $25,000-area. Since Christmas, the level held as concrete support for the third time raised expectations that it would serve as a floor for the next upside run.
Bitcoin consolidates inside a Descending Channel pattern. Source:Many analysts agreed that the BTC/USD exchange rate now eyes a run-up towards $30,000. A pseudonymous daytrader that the pair is trending inside a Descending Triangle, adding that the current technical setup could see it breakout to the upside and at least hit $29,000. Meanwhile, he also noted that a bearish reversal scenario would crash the price towards $23,200.
Bitcoin Open Interest
The statements appeared as Bitcoin Futures listed on the Chicago Mercantile Exchange reported a record number of outstanding derivative contracts, also known as Open Interest (OI). Data fetched by Skew showed that OI on the CME Bitcoin Futures reached $2.6 billion, accompanied by the record-setting daily volume of $1.7 billion. That pointed to a strengthening momentum ahead, especially among institutional traders that rely on regulated exchanges like CME to gain exposure in the Bitcoin market.
CME Bitcoin Futures OI and Volume report. Source:Meanwhile, data analytics platform DataMish noted that the total number of outstanding derivative contracts were majority long. The was 87.37 percent long against 12.63 percent short, reflecting that most investors have a bullish bias for the cryptocurrency. DataMish also showed a decline in the net hedged and unhedged short Bitcoin positions, suggesting that even bears expect the Bitcoin price rally to continue higher without facing major resistance levels.
Institutional Investment Rocketing
The lack of a strong bearish bias comes in the wake of growing institutional capital inflow into the Bitcoin market. Data fetched from ByBt.com shows that Grayscale Investments is holding more than 607,000 BTC worth $16 billion. Meanwhile, other mainstream corporations are raking up their Bitcoin reserves to protect themselves against fiat inflation caused by a depreciating US dollar. Just recently, Nasdaq-listed Greenpro Capital announced it would raise debts worth $100 million to buy Bitcoin, calling the cryptocurrency “a reliable future store of value.”
Grayscale Investments Bitcoin reserves. Source:
“The growth in capital flowing into BTC is now equivalent to Apr 2017 of the last cycle,” said Willy Woo, an on-chain analyst. “The early bull phase is over, the main phase has started; it’s come early.”Bitcoin was trading at $26,591 at the time of this writing.