The key trigger for recent crypto price momentum was Republican Candidate Donald Trump’s US election win in early November. Since pro-crypto candidate Trump won the race to lead the world’s most powerful economy, the price of BTC has increased by around US$30,000. There remains optimism that the Trump administration may add a strategic Bitcoin reserve and make financial market watchdogs like the Securities & Exchange Commission (SEC) easier to deal with for cryptocurrency and blockchain space operators in the United States.

Record Highs in Bitcoin Futures Open Interest

According to data from Coinglass, Bitcoin futures open interest (OI) on the Chicago Mercantile Exchange (CME) hit a record 218,000 BTC or ~US$21 Billion. This is more than a third higher than before the US election. Overall Bitcoin futures interest according to Coinglass hovers at around an enormous 647,000 BTC or US$62 Billion. Velte Lunde, the Head of Research at K33 research has described the surge in CME interest as “relentless”. They said, “the growth in CME OI over the past 15 days is larger than the average notional open interest on CME in any year before 2022.” 

Open interest is the total number of outstanding derivative contracts for an asset—such as options or futures—that have not been settled. A rise in open interest when prices are also rising is a bullish indicator suggesting that the market is backing BTC to continue rising overwhelmingly.

The CME is also a platform generally used by smart money institutions, professional trading desks, and asset managers. The rise in CME OI is a strong bullish indicator.

Sell Wall Stalls BTC’s March to $100k

However, as BTC approached the US$100,000 price level over the weekend, it stumbled. The trading signals account on X @MI_Algos reported a “massive BTC sell wall compressed between $99.3k-$100k range.”  A sell wall is a concentration of sell orders at a specific price level. This acts as a psychological and technical barrier, making it more difficult for the price of an asset to rise beyond that level. Unsurprisingly, there is a sell wall around this price level given the significance of the 6-figure price mark.

Bitcoin hit a ‘sell wall’ as it approached the 100K mark over the weekend. Source: Brave New Coin Bitcoin Liquid Index.

The account continued — “It would be good to see whales start dumping blocks of ask liquidity to force $BTC into a support test and to ultimately make the wall easier to penetrate.” MI_Algos is suggesting that it may be beneficial if large holders place substantial sell orders that will lead to a price decline and a test of support. 

This could make resistance levels easier to test in the future.  A support level is a price point where buying interest, or demand for BTC, tends to prevent further price declines and there is strong BTC support around the US$94,000 price level. A successful test of support is likely to attract buyers who would then perceive the asset as undervalued. With there then being less sell pressure resistance when resistance is reached the next time, the path upward becomes clearer. 

He also noted the impact of BTC spot Exchange Traded Fund (ETF)— “With the ETF faucet turned off for the weekend, we could see some dip buying opportunities ahead.” 

Onchain data provider Glassnode, reports that the profit taking by Long-term holders’ (LTHs) is “accelerating.” They state that over 128,000BTC have been sold by LTHs since early October. But they continue, “LTH’s has so far been offset by the demand from US spot #ETFs, which have been soaking up supply, absorbing ~90% of that selling pressure.

This analysis implies that any selling on spot and derivative markets conducted over the weekend may be covered when US spot BTC ETF markets open for trading on Monday.