Key points:
Bitcoin takes stock of its latest gains after reaching fresh all-time highs above $126,000.
$124,000 emerges as the essential battleground for Bitcoin bulls.
ETF flows and overall institutional demand will be key for the bull run going forward, says analysis.
Bitcoin (BTC) cooled its quest for price discovery Tuesday as traders hoped for a market reset.
Bitcoin open interest in focus at record highs
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $125,000 into the Wall Street open.
Fresh all-time highs the previous day resulted in a modest dip, with $123,200 being revisited before buyers regained control.
“Passive selling on coinbase & taker selling on binance spot led the bleed back to $123.2K,” trader Skew explained in their latest analysis on X.
Skew said that $124,000 was now the “pivotal” price point for bulls to flip to definitive support.
“$BTC is now trying to flip its previous ATH into support,” trader BitBull continued in an X post.
“I wouldn’t be surprised to see a fakeout below it, but overall a few weekly close above $123K is needed. This will set the stage for the next 20%-30% rally in the coming weeks.”
Fellow trader Daan Crypto Trades eyed a significant increase in open interest (OI) on Bitcoin derivatives markets. This, he argued on the day, could benefit from a flush in order to provide sustainable future price upside.
“$7B of OI got added which is about +19% of global OI added. This is not entirely in line with the price which is up +13% during this timeframe. Safe to assume there’s been quite a bit of chasing by longs, especially since the $120K+ break,” an X post read.
“It’s not completely out of proportions but to get a sustainable run, I’d rather see OI come down slightly first. If it keeps running at this pace we risk putting getting overheated earlier.”
Institutional demand now “key” for BTC price
Continuing, trading company QCP Capital queried whether the current phase of the Bitcoin bull run was “sustainable or overextended.”
Related: BTC October price breakout odds low: 5 things to know in Bitcoin this week
“Some may argue the 12% surge in BTC over the past week appears overdone, given the lack of major catalysts. But the narratives driving this rally should not be dismissed,” it wrote in the latest edition of its regular “Asia Color” analysis series Monday.
QCP referenced both outperformance in gold and the ongoing US government shutdown as potential BTC price tailwinds, along with Bitcoin reserves on exchanges hitting six-year lows.
“Still, BTC remains poised between price discovery and prior all-time highs. To extend its trajectory meaningfully higher, institutional participation will be key,” it continued.
The largest institutional Bitcoin investment vehicles, the US spot Bitcoin exchange-traded funds (ETFs), posted around $1.2 billion of net inflows Monday, their second-highest daily tally.
“Ultimately, institutional flows and macro conditions will decide whether BTC’s October run evolves into another parabolic leg or fades into consolidation,” QCP concluded.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
