• Bitcoin’s Open Interest and funding rates have dropped in the past four weeks, suggesting that demand for BTC is low.
• However, rising futures demand has been observed, indicating a possible bullish bias.
• If bullish expectations turn out to be true, we could see a resurgence of volatility and BTC could break out of its consolidation zone. However, there is still a risk of sell pressure pushing the price back down to $28,000.
Bitcoin Consolidation Is Draw To A Close
Bitcoin has been consolidating for four weeks now, with signs that it may break out soon. Futures demand has been on an uptrend while price action remains sideways – a sign that there may be a bullish bias in the market.
Open Interest & Funding Rates Drop
Despite this potential for upside movement, Bitcoin’s open interest and funding rates have dropped significantly over the past four weeks – indicating that demand for BTC may not be as strong as expected.
Rising Futures Demand
The rise in futures demand suggests that Bitcoin could experience an increase in volatility if bullish predictions come true. If so, the king coin could finally break out of its consolidation zone and possibly surge higher.
Price Action Suggests Sell Pressure
However, there is still a risk that sell pressure could push prices back down to $28k or lower – especially since mid-July saw some downward price action from Bitcoin.
Watch For Volatility Resurgence
Overall though it appears that consolidation is coming to an end and we should watch closely for any signs of increased volatility or bearish activity over the weekend or next week.