PayPal’s crypto announcement acted as a trigger that drove Bitcoin (BTC) price to a new 52-week high. During such news-based events, traders holding short positions are caught off guard and are forced to cover their trades, resulting in the type of short squeeze seen during the Oct. 21 rally.
Cryptocurrency market weekly performance. Source: Coin360.com
However, after this initial burst, the next leg of the uptrend is only possible if demand picks up and the bulls continue to buy at higher levels.
Data from Huobi exchange suggests that pro traders are not convinced that the current rally warrants the opening of long positions and Cointelegraph contributor Marcel Pechman explained that this could be a bearish signal.
On the other hand, the open interest on CME Bitcoin futures paints a different picture. The CME has now become the second biggest Bitcoin futures exchange in terms of open interest, second only to OKEx. This suggests that institutional demand could be picking up.
This opposing set of data from Bitcoin futures exchanges only adds to the confusion among traders about the next possible move.
Let’s go a little deep into the psychology of the traders for a better understanding. Institutional investors rarely buy because of FOMO as they are generally more averse to
These large traders may wait for the rally to sustain and complete a successful retest of the breakout level before buying.
Let’s take a look at the top-10 cryptocurrencies in order to determine what the technical indicators project.