Before the recent Bitcoin price spike, these 3 indicators flashed bullish


In the stock market and cryptocurrency fields, traders are always looking for a clear reason to explain the price behavior of assets, which means that emphasis on correlation does not mean that causality is important.

Although it may be easy to link regulatory statements or pending legislation to the outcome of asset prices, there is not always conclusive evidence that these are the exact drivers. Some of the indicators described below may be caused by sheer luck, even though this coincidence has always existed in history.

For example, Bitcoin’s (Bitcoin) The surge to $48,200 on October 1 may be related to the remarks made by Federal Reserve Chairman Jerome Powell on September 30.When asked to clarify his comments on the Central Bank Digital Currency (CBDC), Powell confirmed that the Federal Reserve has Unintentionally banning cryptocurrencies.

Another possible reason for the current rally is Bitcoin’s 7 days Average hash rate jump Reached 145 exahashes per second (EH/s), which is the highest level since the sudden collapse of China’s mining industry in early June.

Finally, raise expectations Bitcoin Exchange Traded Fund (ETF) Approval Policies set by the U.S. Securities and Exchange Commission (SEC) may have played an important role in traders’ recent bullish bets.

Obviously, a variety of factors may have caused the rise to $49,000 last week, and today the bulls seem to be struggling to regain $50,000. So let’s take a look at 3 indicators that signal a “buy” before the recent price changes.

After traders turned their attention to DeFi, UNI got the bid

Uniswap (UNI, left) and Bitcoin (BTC, right). Source: TradingView

Uniswap’s decentralized exchange token, UNI, skyrocketed a few hours before the market rebounded on October 1. Altcoins began to rise at the close of UTC each month, initially rising 5% from US$23 to US$24.20.The move rose 4% to $25.20 three hours ago Bitcoin’s breakthrough More than 45,000 USD.

The weird thing is, DEX trading volume After China imposed additional restrictions on Bitcoin last week, Bitcoin began to soar. A reasonable explanation for this move may be that investors are beginning to understand that China’s actions will not affect transaction volumes. By migrating to DEX, the possibility of government control or restriction of cryptocurrency adoption is greatly reduced.

Short positions on derivatives exchanges have increased

Some exchanges provide useful information about customers’ net exposure by measuring customer positions or integrating data from the spot and derivatives markets. For example, the long-short ratio of OKEx Bitcoin traders dropped from 1.25 (supporting long positions) to 0.72 (supporting short positions) 28% in less than two days.

At first this may sound counterintuitive and indicates that the whales have increased their bearish bets, but when market expectations are broken, extreme price fluctuations often occur. If most traders expect positive price fluctuations, then the result is probably already priced.

OKEx Bitcoin derivatives long-short ratio. Source: OKEx

Binance Futures Open Interests Suddenly Increase

Regardless of the underlying asset, the long (buyer) and short (seller) positions of a futures contract always match. This means that it is impossible to predict whether these investors will favor either side.

However, the sudden increase in open positions reflects the total number of contracts still in operation and reflects confidence. The higher the concepts involved, the higher the stakes.

Binance Bitcoin futures open positions.Source: Binance

Please note that in the 4 hours before the bull market at 6:00 AM UTC, both the USDT perpetual contract and the token-based contract’s open interest surged. Interestingly, even with an additional bet of $400 million, the Bitcoin price is only significantly affected after the open interest peaks.

The fact is that people may never find out what triggered the rally, but by monitoring similar patterns in the future, traders may be able to predict skyrocketing prices. Of course, there is no guarantee that all three indicators will be repeated, but the cost of monitoring data is the lowest.

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