The world’s largest crypto asset, Bitcoin [BTC], broke through the $28,000 barrier for the first time in over six weeks, and investors hoped that the breakout would pave the way for more substantial gains in the days to come.
Buyers dominate the market
The rally pulled Bitcoin out of the narrow trading range it had been in since 2023’s largest market crash in mid-August. At the time of writing, the king coin exchanged hands at $28,065 with gains of 3.75% in the 24-hour period, per CoinMarketCap.
According to CryptoQuant author Maartunn, on 1 October, buying pressure was stronger than selling pressure in the market. This was because the Net Taker Volume flipped into positive territory after a gap of nearly four months.
Historically, Net Taker Volume has been regarded as a reliable indicator for predicting Bitcoin’s next moves.
If the price of Bitcoin is low, and aggressive buying is taking place, it means that a bottom is around the corner. Hence, the press time state of the market pointed towards a dominant bullish sentiment.
Trouble for bearish-leveraged traders
The rally also affected traders who were bearishly positioned. According to a recent update by Glassnode, short positions worth nearly $6 million were wiped out on cryptocurrency exchange Binance. This was the largest short liquidation in more than a month.
Furthermore, the Open Interest (OI) in Bitcoin futures jumped to $12.31 billion, representing an increase of 7.28% over the past 24 hours, as per Coinglass. An increase in OI coming alongside an increase in price is interpreted as new money entering the market and is thus a bullish sign.
Surprisingly, despite the price rip and short liquidations, the majority of the traders bet in favor of future price drops. The number of shorts outpaced the longs in the futures market as of this writing.