Bitcoin's 22% Rally Isn't Enough, It Must Break August High To Overcome Downtrend, Bitfinex Analysts Say

Bitcoin BTC/USD reached a new local high of $64,200 on Sep. 20, but analysts caution it must surpass the August high of $65,200, a level that has proved challenging since the all-time high of $73,666 in March.

What Happened: Until Bitcoin breaks this crucial resistance, the asset remains in a long-term downtrend, according to Bitfinex analysts.

In a report sent to Benzinga, the analysts highlighted that recent gains have been largely driven by perpetual and futures markets rather than spot market activity, which has notably slowed.

Spot Cumulative Volume Delta—a key indicator of spot buying—has flattened, particularly once Bitcoin’s price moved past $63,500.

This is a potential red flag for those looking for sustained upward momentum.

The Bitfinex team advocates for caution in the near term, stating, “We advocate taking a cautionary approach after the 22 percent rally we have seen in BTC. It is now entirely possible that the price could form a new range near current prices and consolidate for a period, as we have seen following similar previous price rallies.”

While the market's near-term movements have been positive, open interest in Bitcoin has outpaced price gains, indicating that the futures and perpetual markets are leading the charge.

Also Read: China Controls 55% Of Bitcoin Hashrate Despite Crypto Ban, But The US Is Catching Up

This decoupling of open interest and price is a cause for concern, as it suggests that leveraged positions are playing a larger role in recent market movements, making a short-term correction more likely.

In the broader market, some altcoins have surged over 100% from their August lows, but analysts also urge caution here, noting that open interest for altcoins has risen significantly without corresponding price breakouts.

On a positive note, renewed interest in spot Bitcoin ETFs, with $397.2 million in inflows last week, could provide the necessary push to break resistance levels.

The report suggests that a breach of the August high, coupled with ongoing ETF inflows and a potential rally in traditional markets like the S&P 500, could propel Bitcoin toward new highs.

What’s Next: These critical insights into Bitcoin's market movements and the ongoing fluctuations in the cryptocurrency landscape will be a key topic at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders and investors will discuss the future of Bitcoin, cryptocurrency regulation, and market dynamics.

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• Bitcoin’s On-Chain Metrics Are Turning Bullish: What Is Going On?

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