What is Bitcoin’s path forward if Binance unleashes a wave of volatility?

A much-anticipated relief has arrived in the crypto markets as Bitcoin is up around 5% and is currently trading at $ 49,350. BTC’s abrupt surge at the start of the new week pulled global crypto market capitalization up 3.51% in a single day, making way for a much-needed rally.

Real recovery or trick?

After the December 4th slump, BTC rebounded 6% over the next few days. However, it was unable to maintain its upward momentum and fell even lower in just a day. The price also recovered in a similar way on December 12th, December 15th-16th. and last on 19.12. by almost 5%.

After every one day price hike in the past 2 weeks, BTC has failed to maintain the positive promotion. So it makes perfect sense to question the recent recovery.

Source: TradingView

What’s different this time?

First, recent upward momentum has brought BTC from a lower limit of $ 45,850 to over $ 49,000 in one day. In addition, short-term owners’ losses from the sale of assets are decreasing and setting higher lows. In parallel with the intensification of the price movement, there is a bullish divergence that shows almost no seller interest at these levels.

The source: TXMCTrades

In addition, the NVT (NVTS) signal for Bitcoin, which does not normally signal “oversold”, gave that signal at press time, indicating a reversal from the lower range is imminent.

The source: WillyWoo

Previously, every time it was oversold, NVTS rallied from this zone and the price rose as well. The key question now is whether the current move is really a recovery?

A wave of upheaval is waiting …

Another key figure worth mentioning is the 14-day BTC Futures Open Interest (OI) change of more than 10%. In the past, OI changes of 15% or more have caused volatility in this coin.

Additionally, the open interest for Binance futures has increased over 30% in the past few days, along with a + 7.4% increase in BTC balances on the exchange.

Source: TXMCTrades

While the funding rate remains neutral, the move could indicate impending volatility as Binance currently owns more than 25% of all open positions in the market.

Source: TXMCTrades

Coupled with the increased volatility, activity is slowing as the volume of on-chain transfers has dropped from around $ 10-11 billion per day to $ 7.2 billion since December 4th.

Source: Glassnode

Therefore, while the macro setup could be bearish in the short term, there are still signs of a bullish on-chain price for Bitcoin. Additionally, BTC could fluctuate in either direction towards the end of 2021 so it will be interesting to watch.

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