The slight up-tick in both mood and prices has been accompanied by an increase in trading volumes across derivatives exchanges.
We are also seeing a pick-up in options open interest.
There have been reports of a large build-up in short positions over the last week, and today we have seen an increase in auto-liquidated leveraged short positions. A break above $40,900 will likely see this number rise by a factor of 4 to then be the catalyst for a return to the mid $40,000s.
With the funding rate still sitting at zero, the market is evenly balanced, as demonstrated by the continuation of range trading. It will feel bullish at the top and bearish at the bottom for a while.
Only a break below $30,000 or above $41,000 will change this sideways outlook.
Bitcoin has rallied back to the upper end of the trading range, with the bulls pushing from a break above $39,000. Momentum once again stalled, and now we look for support at $36,400 to act as a barrier to lower prices and a return to the lower end of the range.
Below $36,400, Bitcoin will start to feel heavy again, with $35,000 acting as support ahead of a retest of $33,600.
Should we continue to hold above $36,400, we will see repeated attempts to push through resistance at $38,600. It is not until we break clear of $40,900 that the bulls can declare a short term victory over the bears.
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