Bitcoin Bulls Profit from Weekend Trading: A Healthy Rally Despite OI Surge

BTC price is hovering around $52,000 while CME Bitcoin futures open interest reaches a record high of $6.8 billion.

BTC/USD 1-hour chart. Source: TradingView

Bitcoin (BTC) returned to the center of an intraday trading range into the Feb. 18 weekly close as bulls profited from weekend trading. Despite a dip to $50,680 on Bitstamp, the largest cryptocurrency saw a swift rebound adding nearly $1,500 in hours, showing no signs of fresh retest lows. The market sentiment continues to be positive with Skew, a popular trader, mentioning a change in trader behavior in the latter half of the Wall Street trading week. Additionally, spot buying witnessed a decline towards the weekend. However, Skew observed that spot buyers are returning, with Binance leading the way.

Meanwhile, open interest (OI) on CME Group’s Bitcoin futures markets has hit a record $6.8 billion, indicating potential volatility to come. While this may cause some concerns, a popular trader, Daan Crypto Trades, believes that the +100% rally since October has been healthy in terms of leverage. Funding has mostly remained neutral, and open interest denominated in BTC is lower. Bitcoin’s underlying asset value has gone up in USD terms, which explains the increase in open interest in USD value.

Key BTC Price Weekly Close Levels to Watch

CME Group Bitcoin futures open interest (screenshot). Source: CoinGlass

• Cardano (ADA) Surpasses Market Downturn with Impressive Growth and Bullish Momentum 🚀
• Chainlink fans expect big growth after a whale buys $216 million worth
• 🚀 The Rise of Meme Coins, Interoperability, and P2E Gaming in the Cryptocurrency Market 🚀

To preserve the upward momentum, bulls need to pay attention to Bitcoin’s relative strength index (RSI) on 4-hour timeframes leading into the weekly close. The 21-period exponential moving average (EMA), currently at $51,500, also holds importance. Skew highlights that spot flows in the $52K – $53K area show notable spot selling into bounces, which is often a pattern of profit-taking in the market. Ultimately, the current uptrend will depend on sufficient spot demand on dips, where limit buying outweighs taker selling.

Matthew Hyland, another trader and analyst, warns that $49,000 is the crucial line in the sand to protect for the close. This level is significant for maintaining the positive momentum and preventing a potential reversal.

Q&A

Q: Does the surge in open interest indicate increased volatility?

A: Yes, a surge in open interest on CME Group’s Bitcoin futures markets indicates potential volatility in the market. It suggests that more traders are participating and taking positions, which can lead to rapid price movements.

Q: What does it mean to have leverage in a rally?

A: Having leverage in a rally refers to traders using borrowed funds to amplify their potential profits. In this context, the trader mentioned that the BTC rally has been healthy in terms of leverage, indicating that it hasn’t been driven solely by excessive borrowing and speculation.

Q: Why is the relative strength index (RSI) important for Bitcoin’s weekly close?

A: The relative strength index (RSI) is a popular technical indicator used to measure the strength and speed of price movements. Monitoring the RSI leading into a weekly close helps traders gauge the overall market sentiment and identify potential price reversals.

Future Outlook and Investment Recommendations

As Bitcoin continues to consolidate in the $52,000 range, it is crucial for bulls to sustain the upward momentum. The market sentiment remains positive, with spot buyers returning. However, traders should remain cautious of potential profit-taking during bounces. The market’s reaction around the $52K – $53K area will be critical.

Considering the surge in open interest and the ongoing rally, investors should closely monitor market trends and make informed decisions. While the rally has been healthy thus far, it is wise to evaluate risk factors and set appropriate stop-loss levels to protect investments.

References

• Bitcoin Range Consolidation Sets the Stage: SOL, AVAX, RNDR, SUI
• Bitcoin is now at or near all-time highs in these 5 fiat currencies
• Blocking.net Markets Pro
• TradingView
• [Twitter: @52kskew](https://twitter.com/52kskew/status/1759082505809043948)
• CoinGlass
• [Twitter: @DaanCrypto](https://twitter.com/DaanCrypto/status/1759193797739921599)
• [Twitter: @MatthewHyland_](https://twitter.com/MatthewHyland_/status/1758888939471987037)

---

That’s all for today! Share your thoughts on Bitcoin’s rally and make sure to follow us for more exciting updates in the world of cryptocurrency. 💰💻🚀

We will continue to update Blocking; if you have any questions or suggestions, please contact us!