The price of Bitcoin (BTC) has surged over 25% since its September 6 low of approximately $52,546. On-chain and technical indicators suggest that BTC may continue this recovery towards new all-time highs.
All-Time Highs in Bitcoin Open Interest
Bitcoin’s open interest (OI) for weighted perpetual futures has reached a multi-month peak, indicating that the current bullish sentiment could persist in the near term.
Data from CoinGlass shows the current Bitcoin OI-weighted funding rate stands at 0.0136%, a level not seen since June 7, when Bitcoin touched $71,950.
Generally, positive funding rates signal bullish market sentiment; however, due to the crypto market’s volatility, this should be interpreted judiciously.
Bitcoin OI-weighted funding rate. Source: CoinGlass
Further insights from market intelligence firm CryptoQuant reveal that the open interest (OI) of Bitcoin across all exchanges reached a new all-time high of $19.7 billion on October 15, indicating increased market activity as more capital flows in.
“This upward trend in the derivatives market signifies a growing influx of liquidity and heightened interest within the cryptocurrency sector,” CryptoQuant analysts stated in their latest post on X.
“The increase in funding rates suggests a prevailing bullish sentiment among traders.”
Bitcoin OI across all exchanges. Source: CryptoQuant
While high open interest indicates greater investor interest, it shouldn’t be seen as inherently bullish since futures longs (buyers) and shorts (sellers) always balance each other out. Rising open interest tends to create volatility rather than suggesting a clear directional bias.
Downtrend in Bitcoin Supply on Exchanges Continues
On-chain data tracking BTC supply on exchanges further substantiates the potential for a Bitcoin rally to record highs, as the supply continues to decline, reaching a near five-year low, according to CryptoQuant.
As of October 15, centralized exchanges held around $2.68 million BTC, a 20% decrease from the all-time high of $3.37 million BTC recorded in July 2021, occurring concurrently with a 55% year-to-date rise in Bitcoin’s price.
Bitcoin reserves on exchanges. Source: CryptoQuant
The drop in exchange supply suggests a preference among traders for holding BTC rather than converting it to fiat or other digital currencies, enhancing Bitcoin’s potential to sustain its bullish trend into 2024.
Growing Demand for Spot Bitcoin ETFs
Institutional investors may be instrumental in sustaining Bitcoin demand as they continue to invest in spot Bitcoin exchange-traded funds (ETFs).
According to SoSoValue Investors, U.S.-based spot Bitcoin ETFs have recorded positive inflows in four of the last seven trading days, indicating ongoing institutional interest in these investment vehicles.
On October 14, these products experienced the highest net inflows since June 4, with more than $555.8 million flowing in.
Total spot Bitcoin ETF net flow. Source: SoSoValue
“It was a ‘monster day for spot BTC ETFs,’” said ETF Store President Nate Geraci on X, noting they approached $20 billion in net inflows over the last ten months, surpassing every pre-launch demand forecast.
“It’s advisers and institutional investors continuing to gradually adopt.”
Bitcoin RSI Indicates Potential $233,000 Price
Bitcoin has been consolidating below its previous all-time high of $69,000 over the past four months. However, the monthly RSI suggests an upcoming rally in the following weeks.
In an October 14 analysis on X, independent analyst Bitcoindata21 employed standard deviation techniques on the monthly RSI, predicting BTC could peak around $233,000 during this bullish cycle.
The analyst referenced historical peaks in monthly RSI readings that align with Bitcoin price cycle tops.
“So the question is whether you believe an 88-90 monthly RSI is likely? If so, why wouldn’t $250k be feasible?”
BTC/USD weekly chart. Source: Bitcoindata21
The analyst suggests Bitcoin can hit these six-figure levels as early as the first quarter of 2025.
Related: Metaplanet shares rise 16% after acquiring 107 Bitcoin
Bitcoin Supported by Strong 200-Day SMA
On October 14, Bitcoin’s price climbed above a crucial level aligned with the 200-day simple moving average (SMA), currently positioned at $63,335, initiating a recovery across the market.
Efforts to reclaim this level have failed previously, lacking momentum to trigger a significant trend.
It is noteworthy that during the last three instances when BTC surpassed the 200-day SMA, it prompted a parabolic price increase.
At the time of publication, Bitcoin was trading above this pivotal level, which serves as immediate support.
BTC/USD daily chart. Source: TradingView
Data from IntoTheBlock indicates that the 200-day SMA at $63,336 lies within a demand zone of $61,770 to $63,728, where approximately 1.1 million BTC were previously acquired by 2.5 million addresses.
IOMAP chart. Source: IntoTheBlock
The chart above also implies that Bitcoin is positioned on relatively robust support compared to the resistance it encounters in its recovery journey, suggesting that the path of least resistance is upward.
This article does not constitute investment advice or recommendations. Every investment and trading decision has associated risks; readers should perform their own research before making any decisions.
