Bitcoin Price Action: Overcoming $116,000 Resistance Depends on Fed’s Interest Rate Decision and US-China Trade Summit
Bitcoin (BTC) price has shown remarkable strength, rising 13% since its historic liquidation sell-off on October 10th. However, to reverse the uptrend, daily closes above $116,000 are required, according to technical charts. The ability of Bitcoin traders to overcome this price resistance could depend on the Federal Reserve’s interest rate decision on Wednesday and the US-China trade summit this week.
Professional traders are participating in the rising BTC prices, while small investors are buying price drops on the spot market and also liquidating them in futures. Data from TRDR shows sellers limiting recent intraday breakouts above $116,000, and order book data on exchanges Binance and Coinbase indicate another wall of demand at $116,000 (Coinbase Spot) and $117,000-$118,000 (Binance Perps).
BTC/USDT 4-hour chart, Binance. Source: TRDR.io
Order Book Data and Open Interest
As can be seen in the order book chart, futures traders have reduced their buy orders to $115,000 to $116,000 as the chance of a run on resistance increased and short liquidations exceeded $49.83 million in the last 12 hours. Global open interest on exchanges has recovered from its October 11 low of $28.11 billion to $31.48 billion, but is still a far cry from the $40.39 billion seen when Bitcoin was trading at $124,600.
Bitcoin Open Interest on all exchanges. Source: CoinGlass
Spot Bitcoin ETF inflows are also increasing, with net inflows of $260.23 million in the last three trading sessions and a notable inflow of $477 million on October 21, a few days after BTC price fell below $108,000.
Detect Bitcoin ETF net inflows. Source: SoSoValue
Investor Behavior and Market Analysis
Data from Hyblock shows that investors with larger order sizes (1 to 10 million) continue to sell the rips, while retail investors (smaller order sizes, 1,000 to 10,000) have bought the dips. Currently, Hyblock’s aggregate order book bid-ask ratio (set at a depth of 10%) shows an order book with many offers, while the real retail long and short account metric shows that short positioning on Binance is increasing.
BTC/USDT 4-hour chart. Binance Offender Source: Hyblock
From an intraday trading perspective, some investors may reduce their risk ahead of Wednesday’s FOMC meeting, where the Federal Reserve will announce its interest rate decision. While the Fed is expected to cut its key interest rate by 25 basis points, traders adjusting their positioning ahead of the announcement have become commonplace in the crypto market.
Risk Events and Market Outlook
Activity in the futures markets may indicate that some traders are expecting perpetrators to take risks and long liquidity to fall, or conversely, to increase the number of short positions, which will be used as an opportunity to trigger downward liquidations. Such a result can be seen in the chart below, where a group of leveraged long positions is currently being liquidated at $112,000 to $113,000.
BTC/USDT liquidation heatmap, 7-day review. Source: Hyblock
While Wednesday’s FOMC meeting is expected to produce a bullish outcome, US President Donald Trump’s meeting with Chinese President Xi Jinping on Thursday is an overarching risk event. If the talks fail for any reason or the market does not view the resulting trade agreement as beneficial to the U.S. and global markets, negative impacts could be felt on stocks and cryptocurrencies.
Until the FOMC and US-China trade deal are resolved this week, it is likely that Bitcoin price will continue to fluctuate between resistance at $116,000 and support at $110,000.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
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