Bitcoin Bulls Brush off Price Correction
Bitcoin

Markets report: Bitcoin bulls brush off BTC price correction as $11,000 nears

Drifting away from $11,500 is no cause for concern, Bitcoin analysts say, as futures open interest keeps climbing

Bitcoin entered a third day of consolidation on October 15 as its latest gains gave way to rangebound trading above $11,000.

Data from price tickers including CoinMarketCap showed daily candles retracing the path above $11,500, with analysts still confident that bulls remain in control.

Having briefly passed the $11,500 level on Wednesday, support failed to materialize on the daily close. At press time, BTC/USD hovered at $11,300, having put in a low of $11,250.

Bitcoin still “incredibly bullish”

As Modern Consensus reported, the mood among traders firmly favors upside over deeper capitulation, after Bitcoin overcame $11,000 resistance and two significant pivot levels at $10,800 and $11,150 over the past week.

The ongoing correction on the daily chart has done little to dent their optimism, and overall market behavior is cause for excitement, says Amsterdam Stock Exchange analyst Michaël van de Poppe. On Thursday he tweeted:

“To be honest, More and more $BTC going from exchanges towards cold wallet storage, Big listed companies allocating cash reserves to $BTC. Is incredibly bullish.”

Van de Poppe was referring to fresh buy-ins from companies including $115 million from asset manager Stone Ridge and $50 million from payment company Square. These followed MicroStrategy’s $425 million purchase, split into two chunks in August and September. 

All of the allocations had at best a negligible impact on Bitcoin price stability, further cementing hopes that the largest cryptocurrency has matured sufficiently to be of broader interest to the institutional arena.

Data from Bitcoin futures appeared to confirm the trend in sentiment this week, with open interest climbing throughout October. Volume, however, remains modest.

Commenting that situation, on-chain analytics resource Skew told observers to examine the forthcoming commitments of traders (COT) report, gathered every Tuesday and due Friday. 

COT reports provide a snapshot of institutional and retail trading positions in Bitcoin, allowing analysts to gauge where investors are buying and selling, and where they plan to buy and sell in future.

“CME #bitcoin futures open interest is rebounding as the carry trade reopens. Watch the COT report this weekend for potentially more leveraged funds shorts,” Skew wrote.

CME Group Bitcoin futures volumes and open interest. (Photo: Skew)

Don’t short BTC now, says famous trader

On the topic of short trading, however, longtime market participant Tone Vays warned that betting on further losses in BTC/USD this week was a dangerous game. The current correction, in his view, would only last four daily candles and not break much below $11,000.

“The daily chart for me is in a complete no-trade zone,” he said during Wednesday’s episode of Trading Bitcoin, his regular markets show on YouTube.

“There are two areas of where I would be interested in taking out a trade,” he said, adding:

“I would not short this one to four-candle correction.”

Nonetheless, for all its bullish characteristics, Bitcoin has yet to challenge $12,000 in any way, seeing momentum run out at $11,700 earlier in the week and failing to challenge resistance closer to that boundary. 

“In a few years from now we’ll laugh about the opportunities you had now,” Van de Poppe countered earlier.

“Stack sats, $BTC is still cheap.”

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Anthony Bevan is a journalist focusing on disruptive finance and cryptocurrency, along with the changing face of the market as Bitcoin gains mainstream adoption. Journalists covering cryptocurrency for Modern Consensus May hold positions in some of the currencies they write about.

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