Bitcoin’s price started the new week with an exciting move to the upside. The leading cryptocurrency registered a price increase of around 9%, reaching a high of over $97,000 and remaining just below its six-figure valuation in the past. Interestingly enough, a recent on-chain revelation shows that an underlying change occurred at the same time as Bitcoin’s price rose on the charts.
Are the BTC bulls back in power?
In a Jan. 16 post on social media platform X, crypto analyst Darkfost said revealed a notable shift in the power dynamics within the chain, which says the bulls are seemingly back in control.
The relevant indicator here is the BTC Net Taker Volume, which tracks which of the buyers or sellers is more aggressive in the market. The metric does this by measuring the net difference between buy and sell market orders executed on derivatives exchanges.
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Before this recent shift, net buyer volume had turned deeply negative, reaching a low of approximately -$489 million. Due to the lack of demand in the market during that period, the price of BTC continued to decline as selling pressure increased. However, this market scenario has changed since Friday, January 16.
Bitcoin Net Taker Volume is now registering a positive value, with over $39 million in buying volume on the futures market. This means that BTC traders are becoming increasingly interested in opening long positions – and doing so aggressively.
Historically, increasing buying interest among futures market participants generally signals rising bullish sentiment. In turn, upward price pressure increases due to leverage, leading to amplified price movements in the short term if they persist.
Bitcoin Market Outlook
Darkfost further explained that while there are signs that Bitcoin ETF inflows could increase somewhat, it is still the case that spot buying has not yet gained enough momentum to sponsor a decisive bullish move. As a result, all eyes are on the derivatives activity as it currently serves as support for the Bitcoin price.
Ultimately, the current scenario is best interpreted as the end of bearish pressure, rather than a blatant structural shift. However, if net taker volume continues to grow positively, the narrative could shift from decreasing bearish pressure to increasing bullish momentum.
Until then, market participants are advised to trade cautiously until it is confirmed that the derivatives-sponsored momentum is sustainable for the flagship’s growth.
At the time of writing, Bitcoin’s price stands at around $95,357, with an insignificant move over the past day.
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Featured image from iStock, chart from TradingView