There is a very important level coming up for the top cryptocurrency. This could be the key to either making or breaking a potential breakout for the most recent bounce. On the other hand, it could also just be the next consolidation spot.
Some analysts are pointing out a key resistance level to watch for at $87,200, which could be important for Bitcoin bulls.
Interestingly enough, the $87,200 level seems to coincide with some previous local high levels for Bitcoin.
Bitcoin's horizontal resistance level is around $86,984. The previous intraday wicks tend to go up to around the $87,200-$87,300 level.
Bitcoin is trading at $85,468 at the moment, according to CoinGecko.
Notably, this test of the resistance level comes just days after Bitcoin broke above the $87,000 level after some surprisingly poor U.S. employment figures. U.S. jobs only grew by 29,000 for the month of September. The unemployment rate also climbed to 4.2%. Bitcoin managed to hold on to the gains just under the $87,000 level after the news.
The importance of the level
The bulls have failed several times to get a sustained breakout above the $87,000/$87,200 level.
Bitcoin did break above from the low $82,000s to the $87,200 area in late September. There was then a pullback down to the $82,700 area or so. Then, there was a bounce off from there. There was another attempt to push up towards the $87,000 level, which was pretty quickly rebuffed. Bitcoin then pulled back down towards the $84,000-$84,500 area.
However, the latest pullback occurred to a much higher low than the September 28 low. So that's a bit of a positive thing short-term. That said, multiple failures to break through the $87,000 level do mean at the very least that there is strong resistance at that level still. Hence, bulls really need to break through there as their key resistance.
Positive funding
A number of the top perpetual futures exchanges have positive funding in place. This includes Binance (0.0072%), OKX (0.0034%), and Hyperliquid (0.0013%).
Generally, positive funding means that there is sufficient bullish demand in the perpetual futures contracts that the long holders have to pay the short holders to help align the contracts with the spot price.
However, it's not screaming excessive exuberance either.
One could argue that it's a healthier environment for a breakout to occur with comparatively less positive funding (compared to it occurring after funding got too positive). Overcrowded long positions can potentially lead to cascade-like liquidations.