Bitcoin Inflows Hit $40B on CME, Binance, Bybit as Traders Anticipate $75k BTC Price Breakout

Bitcoin Price Analysis:

Bitcoin price hit $69,448 on Monday Oct 21, 2024, before a 3% intraday correction toward the $66,700 support. Derivatives market data show traders piling on more LONG positions in anticipation of further upside. Can BTC break into new all time highs above $75,000 in the week ahead?

Bitcoin Retakes $70k as Uptober Rally Continues

After 11% gains last week, Bitcoin price continued on its “Uptober” rally, on Monday Oct 2024. The “Uptober” buzzword due to observations that October has been Bitcoin’s most successful month since inception in 2009.

After a shaky start to the month Bitcoin price trend flipped positive around October 3 as traders responded to positive macroeconomic indicators posted by US authorities.

Last week, BTC reached an 80-day peak of $68,976, but despite failure to cross the $70,000 territory, bulls held on tight.

After closing each of the last 3 trading above the $68,000 mark, BTC price entered another leg-up on Monday, backed by strong institutional demand, especially from the Bitcoin ETFs, and bullish long-term stance posed by Larry Fink CEO of Blackrock, the largest investment firm in the world.

The BTCUSD daily chart above, shows how Bitcoin price rose to a new monthly time frame peak of $69,488, up 15% in the last 12-days. While BTC instantly  retraced sharply towards the $66,700 level at the time of writing, markets data suggests the rally may not be over yet.

Bitcoin Open Interest Hits new All-Time Highs above $40 billion

Rather than enter a profit-taking frenzy, majority of short-term traders in the BTC derivatives markets are still leaning towards more upside. In an indication of this, Bitcoin Open Interest and Funding rate trends continue to flash more bullish signals, despite the 3% intraday Bitcoin price correction on Monday Oct 21.

Coinglass Open Interest (OI) Trends measures total capital stock currently invested in BTC futures markets, while the funding rate tracks fees paid between LONG and SHORT traders. Both indicators combine to provide insights into short-term sentiment  among speculative traders.

Open interest on Bitcoin derivatives reached a record high on Oct. 21, as BTC came close to breaching the $70,000 price point.

As seen in the charts above, Open Interest (OI) on Bitcoin futures contracts reached an all time record high of $40.5 billion, while funding rate also rose to 0.011% it highest in 7-days.

At the time of writing,  Chicago Mercantile Exchange (CME) had the lion’s share of the Bitcoin’s OI with 30.7%, followed by Bybit with 20.4%, and Bybit in a distant 3rd with 15% share of trading.

3 Reasons BTC Could Hit $75k in the Weeks Ahead

Bitcoin’s current derivatives market data trends indicate an overwhelming bullish dynamic. However, look closely at the charts, 3 major indicators stand out.

1. Bulls Driving Current Bull Cycle:

The Chicago Mercantile Exchange, which current routes 30.7% of current BTC trading. Given that the CME dominated by US-based corporate investors, this shows that the current BTC bull cycle is being driven by large investors. Considering that large corporate entities often have longer investment horizon and are likely to HODL, BTC could show more resistance to downward volatility in the weeks ahead.

2. Bitcoin Open Interest now 48% Higher than Nov 2021 Bull Cycle:

Rising open interest indicates an increase in capital inflows towards the Bitcoin markets. The $40.37 billion recorded on Oct 21, is now 4% higher than the $27.30 billion peak recorded during the previous bull-cycle in November 2021. This surge in investor interest and market liquidity put BTC in prime position to advance above the $70,000 level.

3. Bull Traders Showing Ressilence Amid Price 3% Correction:

Funding rate rises when LONG traders pay higher fees to SHORT position holders, to keep their bullish positions open, in hopes of earning amplied profits as prices advance further.  Hence BTC funding rate trending at a 7-day peak on Oct 21, suggests that despite a 3% intraday correction Bitcoin bull traders are looking to double-down on their long positions rather than take profits.

Bitcoin Price Forecast: Bulls to Maintain Momentum if $66k Support Holds

Despite a 3% intraday correction, technical indicators on the BTCUSD daily chart continue to lean bullish. Firstly, Bitcoin’s 10-day moving average (MA) crossing above the 20-day MA, reinforces an optimistic outlook.

Historically, such a crossover suggests potential continuation of the uptrend, driven by strong buying interest. The 10-day MA, currently at $66,700, aligns closely with the critical $66,000 psychological support level. This support is vital in maintaining the bullish outlook, as a breakdown below this zone could trigger more pronounced downside pressure, targeting the 20-day MA at $64,150.

Additionally, the Relative Strength Index (RSI) has recently moved down from overbought levels, now hovering around 59.98. While not overly bearish, the recent 3% intraday correction may have served as a necessary flush of weak hands, clearing the path for more sustained breakout above the $70,000 level

Hence, The Relative Strength Index (RSI), sitting near 59.98, indicates that due to the initial correction, there is now ample room for Bitcoin to gather strength and push well-above $70,000 level during the next breakout attempt. If this scenario plays out bulls may eye $75,000 as the next major target.

In the near-term however, bull must maintain a close above $66,000 too keep up the positive momentum.