Bitcoin’s price to $80K – Here’s why that will happen sooner, rather than later!

Bitcoin’s price has exhibited relative strength on the charts since it touched $79K. In fact, since then, the cryptocurrency has hovered around $77K, establishing a strong demand wall around this price level. 

Is there any explanation for the same? What prompted BTC’s relative stability? Well, according to crypto analyst Darkfrost, the market’s recent endurance is thanks to a recovery in derivatives demand. 

Buying pressure dominates Bitcoin’s derivatives volume

In his analysis, he observed that buying pressure has continued to dominate the derivatives market order flow lately.

For instance – At the time of writing, the Net Taker Volume, smoothed monthly, was holding at $145 million. This metric has held positive for nearly two months. 

A positive Net Taker Volume is evidence of market optimism, with participants consistently piling in. 

As a result, Aggregate Futures Volume recovered from $51 billion in early April to $67 billion – Marking an over $16 billion increase. Traditionally, a higher volume has alluded to a hike in trading activity, with the same often preceding greater price swings. 

During this cycle, every time the market flipped from heavy selling to buyer dominance in derivatives, BTC reacted positively. 

Darkfost posited that based on the previous market history, Bitcoin’s upside momentum could continue, pushing BTC towards $80K. This bullish outlook will hold only if the buy volume in derivatives sustains itself. 

Leverage-driven market pump

That’s not all though as in addition to rising buy activity, Bitcoin’s market is heavily leveraged too. The Leverage Ratio, for example, climbed from 5.8 to 6.3 – A sign of higher market participation. 

At the same time, Aggregate OI rose to $130 billion, further confirming the greater capital flows into derivatives. 

With BTC’s price rising, the high leverage ratio means the prevailing market upside momentum may be largely driven by leverage. By extension, this means that traders have taken larger, riskier bets, exposing the market to greater volatility. 

Often, higher leverage has followed a sudden pullback, as small price swings have led to greater liquidations. 

Can the upside momentum hold?

Despite an uptick in leverage and the associated risk, Bitcoin’s bullish structure has remained intact so far. In fact, the Demand Index has been positive for seven consecutive days – Evidence of sustained market demand.

With this indicator holding positive for an extended period, it means that buyers have held the market well. Historically, sustained demand has strengthened the upside momentum, leading to higher prices.

Therefore, these market conditions, collectively, seemed to be pointing to sustained gains.

Thus, if the structure holds and BTC remains above $77K, it’s likely to flip $80k resistance in the short- to medium-term.

Final Summary

• Buyers are dominating the derivatives market, with the buy-taker volume smoothed monthly hitting $145 million. 
• Despite elevated leverage, Bitcoin’s [BTC] bullish structure remains intact,.