Bitcoin: A 23% increase in market cap would lead BTC in this direction
- Bitcoin exhibited signs of another uptrend amid a possible market cap hike.
- Traders remained long and liquidity was in excess.
Crypto analyst Rekt Capital stated that the total crypto market capitalization could increase by another 10% to 23%. And Bitcoin [BTC] could be the biggest beneficiary of the hike. According to the analyst, the $1.165 trillion point, which once acted as a resistance, was now in support mode for the market.
Total Crypto Market Cap indeed retraced deeper to successfully retest the very bottom of the green area as support ($972bn)
Old resistance (red) has been turned into new support (green)
Now, Crypto Market Cap is trying to break beyond the black resistance of $1.165T
— Rekt Capital (@rektcapital) July 4, 2023
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Previously, Rekt had mentioned that the market cap’s retest of $930 billion would result in a breakout above $1 trillion in May. So, now that the old resistance has turned to support. Furthermore, BTC, which was the major dominant asset in the market could also move higher.
Opportunity still opens up
From the four-hour chart, it might seem that the analyst had a solid point due to the Know Sure Thing Indicator (KST). As an indicator used to determine potential entry and exit points, the KST, at press time, had crossed above the zero line.
Usually, this signifies a positive momentum shift. And it could be a buy signal since the BTC price was not making higher highs and the KST made lower highs.
A look at the Bollinger Bands (BB) revealed that BTC’s volatility had remained in its extreme state. However, this did not translate to unexpected price swings.
Also, BTC’s price of $31,040 did not touch the lower or upper band. Therefore, this suggested that the coin was neither oversold nor overbought.Furthermore, it appeared that a large section of the market believes that BTC’s rally beyond $31,000 was almost here. This was because the funding rate stayed put at 0.01%.
Funding rate and OI align
Typically, the funding rate represents the difference between the perpetual futures market price and the spot price. Negative values mean that short traders are paying a funding fee to the long side.
But since Bitcoin’s funding rate was positive, it suggested a bullish bias and long traders were paying shorts to keep their position. In addition, the demand for BTC might subsequently remain at a high point because of the Open Interest (OI).
Read Bitcoin’s [BTC] Price Prediction 2023-2024
The OI is the total number of outstanding futures contracts in the market when deducted from the closed positions. At the time of writing, the OI was 7.5 billion— the highest value since the new year started. This situation means that new money was coming into the market.
And if the liquidity heightens, Bitcoin’s market cap might increase while the price follows in a similar direction.