Key Points
- Despite a price drop, Bitcoin’s long positions increased, indicating a potential market reversal.
- Bitcoin’s demand surged as the Funding Rates remained positive, hinting at underlying market confidence.
Bitcoin’s Long Percentage on the Rise
Bitcoin (BTC) experienced an increase in long positions as its price saw a significant drop. This trend was particularly evident on Binance and OKX, where the percentage of longs surged when BTC’s price dropped to around $92k. This could suggest a potential market reversal where the bullish sentiment could flip, leading to a price recovery as shorts enter and longs exit.
Signs of a Rebound
Apart from the increase in long percentage, there were other indicators of a potential rebound for Bitcoin. The aggregated funding rate saw a sharp increase as the price escalated, indicating a strong bullish sentiment. However, despite the price drop, the funding rate remained high, suggesting an overextended market. If the funding rate stabilizes or reverses, it could signal potential market moves and define Bitcoin’s near-term trajectory.
Demand and Supply Dynamics
Bitcoin saw a substantial rally, rising from $40k to $74k by the end of the first quarter of 2024. This surge was fueled by increasing demand, as evidenced by the significant drop in inventory at over-the-counter (OTC) trading desks. If the OTC inventory levels continue to fall and demand persists, Bitcoin’s price could further escalate. However, it would face key resistance between $97,500 and $99,800. If Bitcoin surpasses this resistance, it could indicate strong buying momentum, potentially shifting the market sentiment from bearish to bullish.