Bitcoin is struggling below the $68K resistance line
Bitcoin faces difficulty breaking above $68K resistance as market activity moderates considerably. The significant losses from earlier in the week have experienced a sideways trend in the cryptocurrency market during the last several days.
Major cryptocurrencies seem to be trading around significant levels, suggesting that traders are now searching for a direction. Even though the underlying asset of Bitcoin perpetual contracts is depreciating, open interest in them is still high.
Investors are concerned about Bitcoin’s range-bound volatility over the last three months, despite record net inflows across spot Bitcoin ETFs. Prices, however, haven’t matched such projections. Key insights are revealed by recent studies and on-chain data, which may explain why the most valuable digital asset has continued to trade comparatively sideways.
Research by Glassnode indicates that traders may be implementing a cash-and-carry arbitrage technique due to the rise in BTC CME Open Interest and the size of net short positions held by institutions classified as hedge funds.
A market-neutral tactic known as “cash-and-carry arbitrage” is purchasing an asset at the spot market and initiating a short position in the commodity’s futures contract, trading at a premium.
Organizations classified as hedge funds are amassing a growing net short position in Bitcoin. This suggests that the cash-and-carry trading structure, in which the ETFs serve as the vehicle for acquiring the long spot exposure, might represent a significant source of demand for ETF inflows,” the paper says.
However, the asset is above the 200- and 50-day simple moving averages (SMA), suggesting the market feels optimistic. Currently, the price action is at the 50-day simple moving average (SMA), which is in line with a significant support level of $66K. Tested five times in the last two months, a powerful resistance that has transformed into support.
When combined with a funding rate that is still positive, it is implied that buying interest is still predominant. This shows a price difference between the underlying asset and BTCUSDT contracts, probably because of renewed bullish pressure. If bulls can hold onto this last line of defense, the price of bitcoin might rise and reach $72,500. Bitcoin’s price could find support between $60,000 and $57,000 (the 200-day SMA) if the bulls can’t prevail.
The weekly Bitcoin price chart displays a very bullish market structure on a macro level. If it resolves upward, it forms a bull flag with a potential upside of 66%. The Fibonacci retracement tool indicates that when the price of Bitcoin plummeted to $56,500 in April, price movement approached the 0.5 retracement level.
Meanwhile, according to data from on-chain intelligence company Santiment, the quantity of Bitcoin available on exchanges dropped to less than 940,000, the lowest level since 2021. This suggests that investors have a bullish view of the asset and are not planning to sell now.
Bottom Line As of right now, Price action highlights the crypto asset will need some booster to stay above the $70,000 price barrier.
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