- Long positions outweighed shorts despite BTC’s fall below $27,000.
- An increase in buying pressure alongside increasing volatility could be vital to the recovery.
Bitcoin’s [BTC] drop to $26,794 is normally supposed to spread fear about another decline since the king coin was able to hold on to $27,000 for a number of days. However, traders are unperturbed by the decline and are doubling down on long BTC positions.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Unmoved by the decline
Pseudonymous analyst and trader Ali Charts made mention of this unprecedented circumstance on 11 October. Using the Bitcoin long/short ratio indicator, Ali revealed that 65.33% of the positions in the market were long.
As #Bitcoin dips below $27,000, more than 65% of all accounts on #Binance with an open $BTC futures position are going long! pic.twitter.com/LVmNnu9ea5
— Ali (@ali_charts) October 11, 2023
This disparity ensured that the long/short ratio jumped to 1.88. Typically, a value below 1 for the indicator implies that there are more short positions.
So, the value of 1.88 suggests that traders’ sentiment is largely bullish, with the average expectation being a notable recovery for BTC in the short term.
But on the same day, BTC long liquidations were higher than shorts. According to Coinglass, $14.57 million in long positions were wiped out from the market on 11 October.
At the time of writing, shorts were feeling the heat. So, it is likely that traders did not expect the recovery to be quick, and could probably take some days.
Source: Coinglass
Buyers have the edge
Meanwhile, the four-hour BTC/USD chart showed that there was a clear contest between bulls and bears regarding control of the market. However, the Accumulation/Distribution (A/D) line grew to 3.275 million.
The A/D gauges the demand and supply of an asset. In general, a rising A/D confirms a price uptick while a falling A/D denotes a downtrend in value. The increase in the indicator suggests buying pressure for BTC.
Should the A/D increase, there is a chance Bitcoin may exchange hands above $27,000 in the coming days. This was also reinforced by the Bollinger Bands (BB).
At the time of writing, the BB had expanded. Thus, there’s a chance of significant price fluctuations. But it would only be in the upward direction if accumulation continues to outpace distribution.
Source: TradingView
From an on-chain perspective, it also seemed that there was intense accumulation. One metric used to evaluate the possibility is the Bitcoin balance of addresses. This metric is described as the amount Bitcoin holders have in their portfolios.
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According to Santiment, not all holder cohort balances have increased.
However, the balance of addresses holding between 1 to 100,000 coins has been surging of late. If the hike continues, then traders with long positions could be profitable in the end.
