By Marcus Sotiriou, Market Analyst at the publicly listed digital asset broker GlobalBlock (TSXV:BLOK).
Over the weekend, Bitcoin rallied to new local highs of $28,300, as it made a higher high on the weekly time frame. Technically speaking, this signals the start of a new bull trend for digital asset trading and the end of the bear market. To be confident of a trend reversal, we need to see how Bitcoin reacts at the support level of $25,200.
The recent closures of US banking giants have acted as a catalyst for Bitcoin’s price increase, as the drawbacks of the banking system are a key proponent for decentralised assets such as Bitcoin.
In fact, open interest in Bitcoin futures has hit a yearly high, showing how there is now significant speculative interest in the digital asset trading market. CoinGlass data tells us that the nominal value of open interest has reached $12 billion – a 7% gain for the month. Despite open interest not giving us knowledge as to the direction of the positioning, it shows us that there is huge speculation in the market right now, so we could see a big move in either direction. Due to the funding rate of most coins flipping green, I am anticipating a flush in the market soon, as a positive funding rate indicates that the positioning in the futures market is mainly aggressive longs – when there is high open interest with aggressive longs, it typically means over-leveraged longs need to be wiped out.
Balaji Srinivasan, a venture capitalist and angel investor, says hyperinflation is happening now, as he is betting $1 million on Bitcoin reaching $1 million in the next 90 days. He has explained how Bitcoin is “a hedge against hyperinflation, monetary debasement, bank freezes, and wealth seizure.” This could just be a publicity stunt from Balaji to gain attention and make people notice him, as he has received over 100 million impressions on his tweets. However, many crypto enthusiasts agree with his reasoning, causing Bitcoin’s price to spike over the past week and renewed interest in digital asset trading.