3 reasons why traders think Bitcoin price bottomed at $29,500 – Cointelegraph

Traders are showing a renewed sense of hope after Bitcoins (BTC) price held onto the $32,000 range for what could be the second day in a row.

Data from Cointelegraph Markets Pro and TradingView shows that bulls have managed to regroup at the $32,000level, where Bitcoin has hovered throughout the day, but traders are patiently waiting for further confirmation that Bitcoin may be in the midst of a trend reversal before fully reentering the market.

Heres what analysts and investors expect next from Bitcoins price.

According to a recent report from Delphi Digital, an aggressive reversal was observed in the CME futures basis on Wednesday and that this is a bullish sign for BTC traders who scooped up cheap futures contracts. The resulting contango is interpreted as bullish because the futures price is above the spot price of the asset.

As seen in the chart above, the open interest for CMEs Bitcoin futures doubled from $1.25 billion on Monday to $2.5 billion on Tuesday after institutions positioned themselves slightly net long after an extended period of being short.

While leveraged funds remain net short as they utilize CME futures to hedge their spot exposure, Delphi Digital indicated that they have probably closed out some amount of their positions.

Delphi Digital said:

Bitcoins recovery above $32,000 reignited bullish optimism for many traders, but the road ahead is by no means a walk in the park due to the multiple zones of resistance that lie overhead.

According to pseudonymous crypto Twitter analyst Rekt Capital, many of the previous support levels for Bitcoin, including $35,000 and $37,000, could soon act as resistance.

At the time of writing, Bitcoins price is in the process of attempting a sustained breakout above $32,200 where the price has been stuck for most of the day.

Another sign of bullishness came from pseudonymous Twitter user IzzyEibani, who highlighted the recent spike in exchange inflows as a possible sign that the bottom is in.

A closer look at the chart below shows that there have been three instances in the past on Aug. 1, 2017, Nov. 30, 2018, and March 12, 2020, where inflows to exchanges spiked in a manner similar to what was seen on July 16. Each time, the market bottomed within a short time period following the inflows.

If the market unfolds in a similar fashion to the historical pattern, there is a strong possibility that the recent drop to $29,500 may have been the bottom.

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

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3 reasons why traders think Bitcoin price bottomed at $29,500 - Cointelegraph