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Data shows 65% of the market is longing Bitcoin, but this key reason could spoil the

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The overwhelming majority of traders in the crypto market are currently longing Bitcoin, data shows. While some technical indicators point toward a rally to the $8,200 resistance area, the large amount of longs leave the market vulnerable for a potential squeeze.

On both Binance Futures and BitMEX, the funding rate of the Bitcoin futures contract have stabilized at 0.01%. That means, holders of long contracts or buyers are compensating shorters or sellers to balance the market.

Traders are anticipating a rally to $8,000-$8,200 range for Bitcoin

The Bitcoin price has been in a relatively tight range between $5,800 to $6,900 since March 20, for well over 12 days.

When the market is majority long, historical data suggests that the Bitcoin price tends to correct to “punish” late buyers. The low liquidity in the futures market in the aftermath of the March 12 plunge to $3,600 could amplify the sell-off in the near-term.

Josh Rager, a prominent cryptocurrency trader, said that the $6,600 level would need to hold to make a bullish case for the Bitcoin price. He also noted that BTC surged by 7 percent within a four-hour span, which would make it the strongest price move in nine days.

Rager said:

“FROM SUPPORT STRAIGHT INTO RESISTANCE. I’M HOLDING OFF MAKING THE NEXT MOVE UNTIL WE CAN SEE FOLLOW UP THROUGH THIS LEVEL, OTHERWISE, IT’S JUST GOING TO BREAK DOWN HERE. NEEDS TO HOLD $6600S”
” alt=”bitcoin price” width=”1199″ height=”546″ data-lazy-srcset=”https://cryptoslate.com/wp-content/uploads/2020/04/EUjy5kJWsAA4Tqb.jpg 1199w, https://cryptoslate.com/wp-content/uploa...00×137.jpg 300w, https://cryptoslate.com/wp-content/uploa...24×466.jpg 1024w, https://cryptoslate.com/wp-content/uploa...68×350.jpg 768w” data-lazy-sizes=”(max-width: 1199px) 100vw, 1199px” data-lazy-src=”https://cryptoslate.com/wp-content/uploads/2020/04/EUjy5kJWsAA4Tqb.jpg” />
Bitcoin price spikes 7 percent in 4 hours (source: Josh Rager)
Raoul Pal, the CEO of Global Macro Investor, said that the price trend of Bitcoin still remains unclear in the short-term, with $7,000 acting as a heavy level of resistance for the dominant cryptocurrency.

In the long-term, however, Pal noted that Bitcoin is a “beauty.” He explained that the macro chart of BTC remains highly optimistic, as it presents a solid long-term risk-reward.

Pal stated:

“I’M A TERRIBLE SHORT TERM TRADER. BUT, THE BITCOIN CHART LOOKS LIKE A NICE WEDGE WITH A BREAKOUT TO ABOUT $7,000. MAYBE THE LOW IS IN? I THOUGHT A RE-TEST WAS LIKELY BUT NOT SO SURE.
BUT THE LONG-TERM CHART, NOW THAT IS A THING OF BEAUTY….I STILL THINK BITCOIN IS THE BEST LONG-TERM RISK REWARD OF ANY ASSET CLASS I’VE EVER SEEN. A GOOD RISK REWARD HOWEVER IS NOT A GUARANTEE OF REWARD.”
At a larger scale, the Bitcoin price looks to be consolidating in the $3,000 to $7,000 range, right above the lowest downtrend line. Based on the tendency of the Bitcoin price to undergo months of consolidation following a large drop, another leg down would strengthen BTC’s long-term price trend.

Volume is growing

After an initial plunge in mid-March, the daily volume of Bitcoin has started to pick up in the past week. Both futures and spot volumes are starting to pick up, as the Bitcoin price nears a key resistance zone.

The current price action of Bitcoin suggests that a failure to cleanly break out of $6,900 could cause a revisit of recent lows, with an imminent support level at $5,800.

Bitcoin, currently ranked #1 by market cap, is up 5.81% over the past 24 hours. BTC has a market cap of $121.51B with a 24 hour volume of $40.63B.
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