These Bitcoin observations suggest that a range change might be…


Bitcoin [BTC] is back above $20,000 once again but this time there is a notable lack of enthusiasm about it. This is because the cryptocurrency had been bouncing back and forth between the $17,000 to $22,000 range.

The king coin has been shuffling within the same range for the last few weeks. BTC whales played a significant role in enabling the range by buying near the range bottom and selling near the range top.

However, there are some recent observations that strengthen the argument for a potential short-term breakout despite a previously gloomy outlook.

A comparison between the Bitcoin exchange whale ratio and BTC’s exchange reserves revealed an interesting picture. The latter had been declining since March while the former was gradually ascending.

Source: CryptoQuant

The exchange whale ratio particularly achieved higher lows since May. This confirmed that whale activity on exchanges witnessed a rise.

Such an outcome confirmed that larger amounts of BTC were being traded, thus paving the way for more volatile price changes.

The declining exchange reserves confirmed that Bitcoin had been flowing out of exchanges in the last few months. Investors’ sentiment also appeared to have shifted in favor over the last few days, especially in the derivatives market. This was evident considering the rise in open interest and funding rates in the derivatives market.

Source: CryptoQuant

Both open interest and funding rates in the derivatives market have increased significantly in the last two weeks. The current open interest levels were notably higher than they were on 12 September, which was the peak of the previous bullish attempt.

These observations were also consistent with the observed increased demand for BTC by whales and institutions.

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Incoming BTC demand: A drive up to the stars?

The Purpose Bitcoin ETF holdings metric confirmed that the ETF trimmed its balance substantially in the last 30 days. These outflows flattened out at the end of September and the same metric indicated accumulation in the last three days.

Source: Glassnode

The BTC addresses with a balance greater than 1,000 BTC metric behaved almost similar to the Purpose BTC ETF metric. This confirmed that whales have been offloading BTC in September and more importantly, they have started accumulating the coin in the last two days.

Unsurprisingly, BTC’s price managed an overall upside since 22 September, around the same time that derivatives funding rates and open interest pivoted.

Bitcoin’s upside during 4 October’s trading session topped out at $20,475 after interacting with its 50-day Moving Average.

Source: TradingView

Bitcoin’s higher open interest on 12 September stands to be of particular interest. It might indicate more demand at the current price level compared to the previous top which the price was yet to achieve, thus some form of divergence.

Additionally, these observations occurred when the accumulation by whales and institutions was starting to recover from the lower range. Bitcoin mining hashrate too continued to surge, thus acting in favor of the current sentiments.

These findings do not necessarily constitute to confirmation of a price rally but can be considered noteworthy especially if demand continues to grow. Bitcoin might finally sum up enough volumes to exit the current range, but that remains to be seen.

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