Bitcoin’s failure to hold $68,000 could be an early sign that a price reversal is beginning.
Bitcoin’s BTC$68,045 price has rebounded by more than 7.5% in seven days after hitting a 10-week high of $67,922 on Oct. 15. However, a sharp correction in the coming days is possible based on several technical and onchain factors.
The latest BTC price recovery has been fueled by a resurgence in spot Bitcoin exchange-traded funds (ETF) inflows that have surpassed $926 million over the last two days.
Over 90% of Bitcoin’s holders are now in profit
Bitcoin’s recent break above $67,000 saw BTC price rise above the short-term holder realized price as this cohort of traders flipped some of their unrealized losses into profit.
A chart shared by market analytics firm Into The Cryptoverse reveals that only 8.5% of Bitcoin investors were still in a position of loss when the price was at $66,870 on Oct. 16, subsequently accounting for 91.5% of the supply in profit.
The percentage supply in profit and loss evaluates the sum of unspent transaction outputs (UTXO) that are in profit or not by comparing the price when they were last moved and the current price.
If Bitcoin continues to rise from the current levels, more investors will remain in profit. A high number of holders in profit is often seen as a sign of an overheated market, which typically precedes or coincides with price corrections.
As a result of this onchain signal, Bitcoin’s price may see pullbacks over the coming days as investors choose to book profit.
Bitcoin futures OI hits new record high
In September, Bitcoin futures open interest rose sharply, peaking at $35.6 billion on Sept. 26. However, the price failed to break the $66,000 resistance and was followed by an 11.5% correction in 12 days.
Similarly, with the latest run-up above $67,000, the open interest has increased by 20.6% since Oct. 3 to an all-time high of $38.4 billion on Oct. 16, according to CoinGlass data.
Additionally, Bitcoin CME futures open interest also hit an all-time high of 172,430 BTC, worth approximately $11.53 billion at the time of publication.
“The prevailing institutional bias is building long exposure,” K33 Research Senior analyst Vetle Lunde said in response to the surging Bitcoin IO.
“Alongside the wild surge in open interest, futures premiums have climbed to 5-month highs.”
With the current strong demand for BTC futures contracts, investors are contemplating the possibility of a pullback similar to that experienced at the end of September.
Bitcoin price hits resistance at $68K
From a technical point of view, Bitcoin price is facing resistance at $68,000. When the price was rejected from this level on July 29, a 27% loss to $49,577 followed, suggesting that the bears will aggressively defend here once more.
Bitcoin bulls must now produce a decisive daily candlestick close above this level to sustain the rally.
Conversely, failure to flip $68,000 into support over the coming days could cause the price to correct, with the accompanying long position liquidations pulling the price toward $61,000.
Data from CoinGlass showed a wall of ask orders building up above $68,000, reinforcing the importance of this resistance area.
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