As crypto markets continue to rally into Q2 and with ETH Shanghai in the rear view, crypto markets find themselves at pivotal areas with regard to market structure. BTC attempted to move through $31K with ETH breaking back above $2K for the first time since 2022.
That being said, it is important to keep track of how the market moves, and what clues it may leave behind.
As we can see over the last 7 trading sessions, BTC made a strong impulse move out of the $28K price area, quickly moving into the $30K-$31K region. This area is an important contextual level as it represents 2021-2022 range lows, and the price area prior to the 3AC liquidation event.
This strong impulse move has left behind 2 inefficacies, or single prints; the first from $29.3K-$29.5K, and the second from $28.5K-$28.9K. These areas will likely begin to act like magnets should prices begin to consolidate and pull back after such an impressive surge higher.
Going one step further, using Bybit exchange, we can visualize the breakdown of Net Longs versus Net Shorts over this same 7 day trading period. We can easily see that new longs have been the dominant and aggressive player on Bybit, adding an additional 8.7K new long contracts during this time period. For reference, new short positions have declined by roughly 8.6K contracts during this same time period.
This indicates that market participants are getting more and more aggressive as prices continue to move higher. Not exactly my favorite dynamic…
Furthermore, when looking at the entire market in aggregate, we can see:
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funding rates have steadily increased as prices have moved into this $30K region, providing further support to the notion of more aggressive buyers in these regions.
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the impulse move from $28K to $30K+ was supported by short liquidations, as well as increasing aggressive participation, as denoted by the aggregate Open Interest levels climbing consistently (nearly $1bn in OI was added during this move)
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Spot markets have been a consistent participant, which has given bulls the support needed to push this trend to its current levels.
