Over
this
past
weekend,
Bitcoin
(BTC)
experienced
a
significant
rally,
pushing
its
price
above
$63,000—an
increase
of
5.6%
since
hitting
a
low
below
$60,000
on
Friday.
This
unexpected
surge
occurred
despite
a
lack
of
major
news
triggers,
leading
to
speculations
and
analyses
concerning
the
underlying
causes.
Here’s
a
deep
dive
into
three
key
factors
that
might
explain
this
weekend’s
price
action.

#1
Mysterious
Bitcoin
Whale
Activity

According
to
DeFi^2
(@DefiSquared),
the
number
one
ranked
trader
on
Bybit
and
a
leading
wallet
on
DeBank,
a
mysterious
“whale”
has
been
active
in
the
Binance
perpetual
futures
market.
DeFi^2

 

noted
significant
buying
activity
from
this
entity,
stating,
“Since
the
local
BTC
lows
on
Friday,
almost
the
entire
bounce
this
weekend
is
from
a
single
entity
on
Binance
Perps
that
has
hammered
over
$450
million
in
buys
in
500
BTC
blocks
at
a
time
during
the
lowest
liquidity
hours
of
the
market.”

Related
Reading

DeFi^2’s
analysis
sparked
speculations
about
the
whale’s
potential
strategies,
especially
considering
the
impending

Mt.
Gox
distribution,
which
could
further
influence
Bitcoin’s
liquidity
and
price
stability.
He
elaborated,
“Curious
what
the
endgame
is
right
before
the
start
of
Mt
Gox
distribution.
With
a
position
of
this
size,
in
order
to
exit
they’ll
either
need
to
run
the
market
high
enough
to
cause
a
short
squeeze,
or
end
up
becoming
a
massive
cascade
risk
if
the
market
goes
against
them.”

#2
Open
Interest
Build
Up

Crypto
trader
Daan
Crypto
Trades
(@DaanCrypto)
provided
insights
into
how
the
futures
market
contributed
to
Bitcoin’s
price
movements.
His
focus
was
on
the
relationship
between
open
interest
and
market
price,
a
critical
indicator
of
market
sentiment
and
potential
future
volatility.

“During
this
run
up,
we’ve
mostly
seen
Open
Interest
rise
with
a
few
relatively
small
short
squeezes
and
some
long
profit
taking
in
between.
I
think
there’s
a
lot
of
underwater
shorts
from
the
~$60K
region
that
should
get
squeezed
out
if
price
were
to
keep
grinding
higher.
That
$65K
region
is
still
a
big
area
to
watch
out
for,”
Daan

 

wrote.

Related
Reading

Interestingly,
open
interest
on
Bitcoin
increased
from
$30.97
billion
on
Saturday
to
$32.21
billion
by
Monday,
based
on

data
from
Coinglass.
Despite
this
rise
in
open
interest,
the
weekend
did
not
see
substantial
short
squeezes.
The
liquidation
of
only
$35
million
in
BTC
shorts
during
this
period
was
relatively
modest
compared
to
past
events,
such
as
on
May
20
when
the
price
surge
from
$66,000
to
$71,500
resulted
in
$84.2
million
in
short
liquidations.

#3
Technical
Breakout

Another
contributing
factor
was
likely
a
technical
breakout
for
Bitcoin,
which
shifted
the
market
momentum.
Popular
crypto
analyst
CRG
(@MacroCRG)

described
the
weekend’s
price
movement
as
a
“beauty
of
a
breakout.”
He
highlighted
that
both
funding
rates
and
the
perpetual
futures
basis
remained
flat,
which
usually
precedes
a
strong
market
move.

“That’s
a
beauty
of
a
breakout.
Funding
+
perps
basis
flat.
Weekly
close
in
1H
+
weekly
candle
is
a
ginormous
pinbar
with
an
8%
wick
(high
probability
reversal
candle).
Full
send,”
he
stated.

 

The
technical
analysis
shows
Bitcoin
breaking
a
descending
trendline
that
has
been
in
place
since
it
peaked
at
about
$72,000
in
early
June.
The
break
through
this
trendline
on
the
4-hour
Binance
chart,
as
noted
by
CRG,
signals
a
potential
reversal
from
the
recent
bearish
trend.

Moreover,
the
BTC
weekly
close
presents
a
significant
bullish
signal—a
large
pinbar
candle
with
an
8%
wick—indicating
potential
for
upward
movement.

At
press
time,
BTC
traded
at
$63,232.

Featured
image
created
with
DALL·E,
chart
from
TradingView.com

Go to Source
Author: Jake Simmons

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