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Strong Buying Activity Propels Bitcoin Above $55k
Anticipation is building for a potential approval of a Bitcoin ETF this month. While decisions on physically-backed Bitcoin ETFs were delayed, there is optimism for upcoming futures-backed options. Eric Balchunas, Senior ETF Analyst at Bloomberg, suggests a 75% chance of approval for one of the four upcoming futures-backed ETFs.
Source:Twitter
The impact of these developments on Bitcoin’s price remains uncertain, but undeniable is the evident strong buying activity, reflected in both the order book and on-chain indicators.
In trading, each transaction involves a market maker and a taker. Takers execute market orders by buying at the ask or selling at the bid. Increased volume from takers in either direction can significantly influence prices, as they absorb the liquidity of the order book, leading to upward or downward price shifts.
IntoTheBlock’s Trades per Side indicator illustrates taker volume, presenting buy volume as positive and sell orders as negative. On Wednesday morning (EST), a notable surge in strong buying activity was observed, particularly on the Binance exchange.
As of October 6 using IntoTheBlock’s Bitcoin order book indicators
Takers on Binance acquired over 600 BTC within a minute in two distinct instances, underscoring the bullish conviction driving recent price action. On-chain activity further reveals robust buying, as the count of addresses holding one or more Bitcoin consistently expands over the past few months.
As of October 6 using IntoTheBlock’s upcoming ownership v2 indicators
Following a notable decline in Q2 2021, the count of addresses holding 1 or more Bitcoin has steadily risen, indicating accumulation by holders aiming for 1 BTC. This continuous increase highlights their confidence in the recent price surge.
Considering Bitcoin’s growing momentum, assessing upcoming support and resistance levels is crucial. IntoTheBlock’s In/Out of the Money Around Price identifies price levels with concentrated historical buying activity. Using this, we can anticipate seller resistance around the $58,000 price range.
As of October 6 using IntoTheBlock’s Bitcoin financial indicators
Around $58,000, a significant cluster of buying activity involves 790,000 addresses previously acquiring nearly 300k BTC, representing the largest accumulation above the current price. This level may see previous buyers aiming to break-even on their positions. Beyond this point, minimal resistance is anticipated, providing potential for new all-time highs.
In the event of a significant price decline, robust support is expected above $50,000, with 670,000 addresses purchasing 416k BTC. Additionally, some buying activity around $54,000 could serve as a significant level for eager buyers looking to accumulate.
