U.Today – Although the Bitcoin price has been on the rise recently, further analysis indicates that the market might not be ready for a major breakout as most investors are booking profits. Although Bitcoin has shown some bullish tendencies, data suggests that a significant rally may not happen in the near term.
First, market flow indicates a trend where it is more common to view current price action as an opportunity to take profits or sell long positions than to initiate new ones. The actions of traders closing long positions and spot traders taking profits at these points make this clear.
The market may not be ready for an explosive move higher just yet, as these flow patterns usually take some time to develop into a more structural uptrend. Furthermore, to understand the current market position, it is necessary to understand the liquidity dynamics around $60,000 and $61,000.
It seems that sellers are hesitant to push the price higher in the absence of strong buyer support because supply liquidity at $60,000 was pulled back just before a buyer-driven surge. Moreover, there is substantial supply starting at $61,000, which sets a contextual barrier that the market may find difficult to overcome in the absence of increased buying interest.
Positioning in the futures market is another important factor to consider. Perpetual futures data indicates that poorly positioned short positions may have been eliminated, although the trend is still driven by the spot market, which is generally positive for the market.
However, aggressive long positions are not being established, which typically indicate high confidence in a sustained up-move. There does appear to be buying, but not enough to push the price much higher at the moment, based on declining open interest (OI) and rising CVD and delta. Lastly, it is concerning that there have been no limit bids since the lows of $57,000. A high time frame (HTF) rally would require additional support in the form of rising limit bids to give the price a more solid base to rally on.
This article was originally published on U.Today
