3 Reasons Traders Think Bitcoin Price Is $ 29,500

Jul 22, 2021

Traders show renewed hope after Bitcoin (BTC) price held in the $ 32,000 area for the second straight day.

Data from Cointelegraph Markets Pro and TradingView shows that the bulls have tried to regroup at $ 32,000 where Bitcoin has fluctuated throughout the day, but traders are patiently waiting for further confirmation that Bitcoin may be in the midst of a turnaround, before they fully returned to the market.

3 Reasons Traders Think Bitcoin Price Is $ 29,500
BTC / USDT 1-day chart. Source: TradingView

This is what analysts and investors expect next from the Bitcoin price.

CME futures are experiencing a bullish rally

A positive reversal in the base of CME futures contracts was observed on July 21, according to a recent report by Delphi Digital, and this is an optimistic sign for BTC traders buying “cheap” futures contracts. The resulting contango is interpreted as bullish because the forward price is higher than the asset’s spot price.

3 Reasons Traders Think Bitcoin Price Is $ 29,500
Bitcoin based 1 month futures. Source: Delphi Digital

As can be seen in the graph above, the open interest for CME Bitcoin futures doubled from $ 1.25 billion on July 19 to $ 2.5 billion on July 20.

While leveraged funds are still slumping as they use CME futures to hedge their spot risk, Delphi Digital advises that they may have “closed some of their positions.”

Delphi Digital says:

“Overall, the creation of new CME futures is a bit of a bullish story as BTC had a small pump to regain its range a few hours after the New York session ended. As noted above, the CME’s futures base hit negative levels yesterday before announcing a significant reversal. All of the data suggests that when BTC falls below the price range it has been in for months, people will buy futures. “

Several areas of resistance are still in the way of Bitcoin

Bitcoin’s rally over $ 32,000 has rekindled optimistic optimism among many traders, but the path forward is not meant to be a walk in the park as there are many resistance zones above them.

Many previous levels of support for Bitcoin, including $ 35,000 and $ 37,000, could soon act as resistance, according to Twitter crypto analyst, nicknamed Rekt Capital.

At the time of writing, Bitcoin price is in the process of attempting a sustained break above $ 32,200 where the price is stuck for most of the day.

Forex cash flow peaks near market lows

Another optimistic sign came from a Twitter user nicknamed IzzyEibani, who highlighted the recent surge in foreign exchange cash flows as a possible sign that a bottom has been reached.

A closer look at the graph shows that there were three incidents on August 1, 2017, November 30, 2018 and March 12, 2020 in which the inflows into the exchanges increased similarly to July 16. Each time the market bottomed out within a short time after the inflow of money.

3 Reasons Traders Think Bitcoin Price Is $ 29,500
Bitcoin price versus foreign exchange capital flows. Source: KryptoQuant

If the market moves similar to the historical pattern, there is a high possibility that the recent drop to $ 29,500 could mark the bottom.

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