A Bitcoin resistance breakout continues to be among the most monitored technical events in the market amid a crucial week for BTC. Despite the many times BTC has defended an essential support level, the cryptocurrency is once again rallying toward a descending resistance level that has previously limited past rallies.
Despite positive buying pressure seen lately, there are still some concerns from traders amid the expected breakout by BTC. There are clear indications that Bitcoin is heading into a defining point.
Bitcoin Bounces Back After Another Successful Defense of Its Support
Bitcoin has bounced back after yet another successful defense of its support level, reaffirming the belief of the traders. As shown on a chart published on CryptoBusy, buyers intervened close to the lower edge of the current trading range, stopping further downside.
The formation of a huge descending triangle continues to be seen on the daily chart, a structure that has prevailed for a few months now for Bitcoin. Although buyers are defending the horizontal support level, sellers have also been defending the descending resistance trendline.
The current bounce in Bitcoin has brought it closer to the middle of the triangle, but the upper trendline acts as the main technical hurdle.
Descending Triangle Tightens Further
The narrowing pattern of the descending triangle implies that the cryptocurrency is on the verge of making a crucial move. With each passing day, price compression becomes tighter, a situation that often precedes a period of increased volatility.
The previous rallies have been turned away at the descending trendline, underscoring its importance as the resistance level in the market. Meanwhile, there have been attempts from buyers to defend the horizontal support level.
A breakout above the resistance level would be considered a major positive development if it receives good trading volume support. Otherwise, the focus will continue to be on the consolidation phase.
Balance in the Futures Market
Currently, there is a relatively balanced situation in terms of bulls and bears in the futures market of Bitcoin. Compared with some previous months, the level of liquidations has significantly decreased, so we can assume that leverage in the market is not too high at the moment. The largest liquidations were observed in early February and early June, when the amount of long liquidations for some time surpassed the mark of $1 billion. At the moment, the levels of liquidations are much lower, so there are fewer chances for a sharp move due to liquidations alone.
On the other hand, open interest is still relatively high on the main futures exchanges. The leader on the open interest list is Binance with $8.80 billion in Bitcoin futures contracts; CME, Bybit, and OKX also have significant open interest. The futures trading volume is also high, with Binance processing about $9.04 billion in trades.
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