Bitcoin Futures Traders Flipping to Bullish Bias, but Weary of ‘Ugly’ Daily Close

Bitcoin volatility

Bitcoin [BTC] price logs a strong bearish candlestick on the 4-hour and daily charts, as the bulls get rejected from $7200.

Just as the markets were starting to flip bullish, a long ‘shooting star’ candlestick on the daily and 4-hour chart sounds alarms for bears in the markets. Moreover, the dojis (small change between opening and closing) and spinning tops appear in a cluster following the Dofi indicate indecision in the market.

btcusd 4-hour chart
BTC/USD 4-Hour Chart on Bitstamp (TradingView)

The price of BTC at 4: 30 hours UTC on 3rd April 2020 is $6780. Trading analyst, Josh Rager, tweeted on the instantaneous drop,

$BTC 4 hr candle is ugly right now Closing below $6800s wouldn’t be pretty – would like to see reclaim and hold previous December range above $6900

Futures Market

The violent move last night caused liquidations of nearly $60 million in shorts in the past 24 hours. The traders now seem to be holding a neutral bias on BitMEX as the funding rate rises from negative to the default rate.

bitmex funding rate
Bitcoin Futures Funding Rate on BitMEX

As reported yesterday on Coingape, the Open Interest on Okex has risen past the BitMEX, which has led the derivatives space for a long time. The reduction in negative basis on Okex is signalling an increase in the long-interest on Okex.

Moreover, on CME the futures price of May and June contracts is trading at a premium over March futures, suggesting a long-term bullish bias(contango).

The resistance to the bulls is currently at $6800-$7000, a break-out above the high yesterday around $7250 should confirm the bullish bias. The bears looking for a breakdown will eye support around $6,400 and $6,000.

Where do you think the price is headed next? Please share your analysis with us.