3 reasons why traders believe that the price of Bitcoin has bottomed to $29,500

Traders showed new hope after Bitcoin (Bitcoin) The price may remain in the range of USD 32,000 for the second consecutive day.

Data from Cointelegraph Markets Pro with Transaction view Indicates that the bulls have succeeded Regroup for $32,000 Bitcoin is hovering at levels throughout the day, but traders wait patiently for further confirmation that Bitcoin may be in a trend reversal before re-entering the market completely.

BTC/USDT 1-day chart. source: Transaction view

The following is what analysts and investors expect for the Bitcoin price next.

CME Group futures bullish

According to a recent report by Delphi Digital, the basis of CME futures reversed sharply on July 21, which is a bullish signal for BTC traders who bought “cheap” futures contracts. The resulting futures price is interpreted as bullish because the futures price is higher than the asset’s spot price.

Bitcoin 1-month futures basis. source: Delphi Digital

As shown in the figure above, the open position of CME Bitcoin futures doubled from US$1.25 billion on July 19 to US$2.5 billion on July 20. Previously, the institution positioned itself as a “slightly net long after long-term short” .

Although leveraged funds are still at net risk when they use CME Group futures to hedge their spot exposures, Delphi Digital says they may have “closed some positions.”

Delphi Digital says:

“Overall, considering that BTC has a small pump to reclaim its range within a few hours after the end of the New York trading session, CME’s new futures contract creation is a slightly bullish narrative. As mentioned above, Chicago Mercantile Exchange futures The basis touched a negative level yesterday and then reversed sharply. All the data indicate that people are buying futures contracts because the BTC price has fallen below its price range for several months.”

Multiple resistance zones remain on the path of Bitcoin

Bitcoin’s rebound above $32,000 has rekindled the bullish optimism of many traders, but due to the existence of multiple resistance zones, the road ahead is by no means a walk in the park.

According to Rekt Capital, an anonymous cryptocurrency Twitter analyst, many of Bitcoin’s previous support levels, including $35,000 and $37,000, may soon become resistance levels.

At the time of writing, the price of Bitcoin is trying to continuously break above $32,200, and that price has been stuck for most of the day.

Historically, exchange inflows have soared near the bottom of the market

Another bullish sign comes from anonymous Twitter user IzzyEibani, who emphasized that the recent surge in foreign exchange inflows may indicate that the bottom has bottomed.

A closer look at the chart shows that in the past three events occurred on August 1, 2017, November 30, 2018, and March 12, 2020, and the funds flowing into the exchange soared in a manner similar to July 16. Each time the market bottomed out within a short period of time after the inflow.

Bitcoin prices and exchange inflows. source: CryptoQuant

If the market unfolds in a similar way to the historical pattern, it is very likely that the recent drop to $29,500 may be the bottom.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.