Bitcoin traders are gearing up for potential new all-time highs as the cryptocurrency continues its rally, reaching an intra-day high of $67,953 on October 15, 2024. This marks the highest daily close for Bitcoin since July, with the market now focused on a potential breach of the critical $70,000 level.
Bitcoin’s Apparent Demand is Rising
One of the key metrics driving this optimism is Bitcoin’s “apparent demand.” According to CryptoQuant CEO Ki Young Ju, apparent demand, which measures the balance between new supply from mining and long-term holdings, is a crucial indicator for market sentiment. A rising demand suggests that more Bitcoin is being circulated, which has historically preceded significant price increases.
In fact, current levels mirror those seen in February 2024, just before Bitcoin reached its all-time high of $73,800 in March. On-chain researchers, including Axel Adler Jr., have noted a 3% increase in purchasing demand from new investors over the past 10 days, indicating renewed market interest.
Leverage-Driven Rally: A Cautionary Note
While Bitcoin’s spot demand has improved, much of the current price surge can be attributed to the derivatives market. Open interest in Bitcoin futures has increased by 18% since October 11, reflecting heightened speculation and leveraged trading. Analysts like Maartunn have cautioned that such rapid increases in open interest could lead to volatility, as seen in previous instances where high leverage led to sharp corrections.
Capriole Investments’ “Bitcoin Heater” chart supports this view, showing that the market is currently in an overleveraged state, a condition that typically precedes a reset in prices.
Retail Demand Still Lagging Behind
Despite the price surge, retail interest remains low. Crypto Rover, the founder of Cryptosea, highlighted that retail participation is “close to zero,” even as Bitcoin nears its all-time highs. This is reflected in the negative premiums on Coinbase and Kimchi indexes, which indicate that retail investors are still hesitant to enter the market.
However, some analysts believe that this lack of retail participation may be indicative of a “disbelief” phase, where prices are low relative to future potential gains. In such phases, Bitcoin is often seen as undervalued by retail investors before a larger market rally takes hold.
Resistance at $68,000: Can Bitcoin Break Through?
While the rally has been strong, Bitcoin faces significant resistance at $68,000, a level that has proven difficult to breach. The supply zone between $67,000 and $68,300 is a key area of focus, and Bitcoin’s price has already experienced a sharp correction after testing this range.
Historical patterns suggest that unless Bitcoin can close a daily position above $68,300, it may continue to face challenges in breaking through the $70,000 barrier this week. The descending trendline that has been in place since March 2024 is also being closely watched, as a breakout above this trendline could signal the next leg of the rally.
Outlook for the Coming Days
With just a few days remaining before October 20, Bitcoin traders are closely monitoring the market for signs of a breakout or further corrections. If Bitcoin can consolidate above $68,300, the path to $70,000 may become clearer. However, a failure to do so could lead to a pullback, particularly if the leverage-driven rally continues to fuel market volatility.
As the cryptocurrency market braces for the next move, traders will need to stay vigilant, balancing optimism with caution as Bitcoin’s price action unfolds.