Bitcoin has not shown any weakness, and the bullish trend seems poised for an extension in the coming days. According to a report from Arcane Research, cryptocurrencies continue to lead the crypto rally as institutions return to the nascent sector, injecting more strength into price action.
At the time of this writing, Bitcoin is trading at $22,900 with sideways movement over the last 24 hours. During the previous week, BTC price recorded 8%. Other cryptocurrencies in the top 10 by market cap recorded gains, moving in line with the crypto benchmark.
Institutions Show Fresh Interest In Bitcoin
According to the report, Bitcoin has rebounded from its lowest level in a year by reducing over-leveraged short positions. The liquidation operated as fuel for today’s rally that allowed market makers to push prices into previously lost territory.
In the past, when Bitcoin took an overleveraged position, the market weakened. Arcane Research notes the opposite, the cryptocurrency continues to show signs of strength with its 7-day average trading volume increasing.
On the contrary, it indicates a spike in speculative appetite in the market and short-term support for further appreciation. Bitcoin trading volume for this period recorded an average of $1 billion per day on trading platforms, except for Binance. The latter recorded a trading volume of $10 billion during the past week.
According to the report:
The huge trading volume indicates that speculative appetite has grown. When a structural short squeeze results in strength, it can be expected that the momentum is supported by sustained high spot volume.
In addition to the above, Arcane Research is optimistic about the short term of BTC due to the increase in institutional interest in the cryptocurrency. This increase is visible in the Chicago Mercantile Exchange (CME), as seen in the chart below.
On this platform, Open Interest, total positions for BTC derivatives have seen an increase of 21% in the last 7 days. The report noted:
The positive trend thrown with the growing relevance of the CME is a promising observation given the important role of the CME in BTC price discovery, and shows that institutional flows contribute to the new strength.