Bitcoin open interest suggests the potential for fresh volatility as BTC price support levels become clear for the weekly candle close.
Bitcoin
BTC
$51,791 returned to the center of an intraday trading range into the Feb. 18 weekly close as bulls profited from weekend trading.
BTC/USD 1-hour chart. Source: TradingView
Trader: Bitcoin rally “healthy” despite OI surge
The largest cryptocurrency saw a dip to $50,680 on Bitstamp the day prior, marking its lowest levels in several days.
A swift rebound added nearly $1,500 in the hours that followed, however, and at the time of writing, the lows had not seen a fresh retest.
Analyzing the week’s action, popular trader Skew flagged a change in trader behavior in the latter half of the Wall Street trading week.
Spot buying, he revealed, had subsided toward the weekend, with “mostly taker driven dips & bounces since.”
“So far seeing some spot buyers return here with binance spot leading,” he wrote on the day.
Meanwhile, burgeoning open interest (OI) on CME Group’s Bitcoin futures markets hitting a record $6.8 billion was indicative of volatility to come, per data from monitoring resource CoinGlass.
CME Group Bitcoin futures open interest (screenshot). Source: CoinGlass
Discussing open interest more broadly, however, popular trader Daan Crypto Trades noted a divergence when this was denominated in BTC.
“Funding has mostly kept it’s neutral rate and open interested denominated in $BTC is lower. In USD value of course it has gone up during this time as the underlying asset (BTC) went up in value.”
Key BTC price weekly close levels emerge
Continuing, Skew said that bulls needed to preserve upward momentum in Bitcoin’s relative strength index (RSI) on 4-hour timeframes into the weekly close.
The 21-period exponential moving average (EMA), currently at $51,500, was also important.
“In terms of spot flows around $52K – $53K area, notable spot selling into bounces which is often the case with profit taking,” he explained about the landscape on Binance.
“Key from here with current uptrend is seeing sufficient spot demand on dips, mostly seen as absorption at the lows where limit buying outweighs taker selling.”
