Bitcoin is keeping traders on their toes as it aims for a $40K price target, even in the face of declining trading volume.
Traders are being cautioned by a warning that there's an unsettling vibe surrounding the recent surge in BTC price, despite Bitcoin open interest surpassing $17 billion.
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Bitcoin's Surprising Surge to $37,000
Bitcoin has recently surged to $37,000, reaching levels not seen in 18 months, garnering attention from traders and investors.
BTC/USD 1-hour chart. Source: TradingView
Mixed Reactions Amidst Impressive November Performance
Despite a commendable 6.6% increase in November and a substantial 30% gain in October, there's a growing sense of skepticism about Bitcoin's current price movement.
Concerns Raised by Material Indicators
Material Indicators, an on-chain monitoring resource, raises concerns about the lack of strong trading volume support at the current levels of Bitcoin's surge. The organization notes that while there has been brisk upside, the absence of robust volume support raises questions about the sustainability of the current price levels.
Red Flags: Price Appreciation on Declining Volume
Material Indicators specifically highlights a potential red flag: the price appreciation is occurring on declining volume, a scenario that typically raises concerns in market analysis. The organization emphasizes the need to monitor the situation to see if this time is different.
Skew's Warning: Whale Selling Near $40,000
Popular trader Skew adds to the caution by revealing ongoing whale selling activity near the psychological level of $40,000. This level is now seen as a key psychological threshold, and the presence of whale selling suggests a certain level of resistance at this point.
Tedtalksmacro's Insight: Increasing Open Interest
Financial commentator Tedtalksmacro points to a positive aspect, highlighting the increasing open interest (OI) in Bitcoin futures, which is approaching a seven-month high. Open interest has been a significant factor influencing rapid upside moves in recent weeks and months.
A Full Bullish Scenario: Trending Higher on Higher OI
Tedtalksmacro suggests that a full bullish scenario would involve the market trending higher on higher open interest, indicating a potential shift in market sentiment.
Cautious Optimism in Bitcoin's Market
In summary, while Bitcoin has experienced a remarkable price surge, traders and analysts express caution due to concerns about trading volume, potential resistance near $40,000, and the need for sustained open interest for a more bullish market outlook.
Bitcoin exchange futures open interest (screenshot). Source: CoinGlass
