Bitcoin has surged to a significant milestone, reaching $37,000 for the first time in 18 months. However, this impressive price action has raised suspicions among traders and market observers.
Bitcoin’s recent price surge, which saw it break through the $37,000 mark, is now targeting the elusive $40,000 level.
This upward movement in November has surprised many in the market, especially after the cryptocurrency gained nearly 30% in October.
One area of concern highlighted by on-chain monitoring resource Material Indicators is the lack of strong trading volume to support this rally.
While the price has been climbing rapidly, the volume of trading activity hasn’t followed suit. The support level is currently holding at $33,000, while resistance has shifted to the $42,000 range.
Material Indicators emphasized the unusual nature of this price move, stating, “There is no denying the fact that price has been challenging a number of different local top signals, but there is also no denying that something doesn’t seem right about this move.”
They pointed out the red flag of price appreciation on declining volume, a pattern that often leads to unfavorable outcomes.
Meanwhile, prominent trader Skew has noted ongoing whale selling pressure as Bitcoin approaches the $40,000 mark, which has become a psychologically significant level.
In addition to price action, open interest (OI) in Bitcoin futures has been on the rise. According to data from CoinGlass, total Bitcoin futures OI has surpassed $17 billion, reaching its highest level since mid-April.
Financial commentator Tedtalksmacro has highlighted the importance of OI in recent rapid upward movements in the market.
He noted that during bearish periods, the market tends to fade these OI impulses, leading to a ranging and unpredictable environment.
Bitcoin’s recent price surge may be exciting for many, but the concerns surrounding trading volume and the potential impact of large whale selling have made traders cautious.
Additionally, the role of open interest in recent market dynamics adds another layer of complexity to the ongoing Bitcoin rally.
Market participants will be closely monitoring these factors to determine the sustainability of the current price levels.