Bitcoin (BTC) experienced a significant rally this past weekend, pushing its price above $63,000 — up 5.6% since hitting a low of just under $60,000 on Friday. This unexpected rally came despite a lack of major news triggers, leading to speculation and analysis about the underlying causes. Here’s an in-depth look at three key factors that could explain this weekend’s price action.
#1 Mysterious Bitcoin Whale Activity
According to DeFi^2 (@DefiSquared), a top trader on Bybit and a leading wallet on DeBank, a mysterious “whale” has been vigorous in the Binance futures market. DeFi^2 recorded significant buying activity from this entity, stating, “Since the local BTC lows on Friday, almost the entire rebound this weekend has come from a single entity on Binance Perps, which achieved over $450 million in buying across 500 BTC blocks at once during the market’s lowest liquidity hours.”
The DeFi^2 analysis has sparked speculation about potential whale strategies, especially given the upcoming Mt. Gox distribution, which could further impact Bitcoin’s liquidity and price stability. He explained: “It will be interesting to see what the endgame is just before Mt. Gox distribution begins. With a position of this size, to exit, they will either have to keep the market high enough to cause a short squeeze or become a huge cascading risk if the market goes against them.”
#2 Building Open Business
Crypto trader Daan Crypto Trades (@DaanCrypto) provided insight into how the futures market has contributed to Bitcoin’s price movements. He focused on the relationship between open interest and market price, a key indicator of market sentiment and potential future volatility.
“During this rally we have seen mostly an increase in Open Interest with some relatively small short squeezes and a few long gains in between. I think there are a lot of underwater shorts in the ~$60k region that should be squeezed if the price continues to rise. That $65k region is still a big area to watch,” Daan he wrote.
Interestingly, Bitcoin’s open interest rose from $30.97 billion on Saturday to $32.21 billion on Monday, based on data from Coinglass. Despite this raise in open interest, the weekend did not bring any significant miniature squeezes. The liquidation of just $35 million of BTC miniature positions during this period was relatively modest compared to past events, such as on May 20, when the price rally from $66,000 to $71,500 resulted in $84.2 million of miniature liquidations.
#3 Technical Breakthrough
Another contributing factor was likely Bitcoin’s technical breakout, which changed the market dynamics. Popular cryptocurrency analyst CRG (@MacroCRG) Described weekend price action as a “beauty breakout.” He stressed that both funding rates and the perpetual futures basis remained flat, which typically precedes a sturdy market move.
“This is a beautiful breakout. Funding + perps base flat. Weekly close in 1H + weekly candle is a huge pinbar with 8% wick (high probability of candle reversal). Full send,” he stated.
Technical analysis shows Bitcoin breaking a descending trendline that has been in place since peaking around $72,000 in early June. A break of this trendline on Binance’s 4-hour chart, CRG noted, signals a potential reversal from the recent downtrend.
Moreover, BTC’s weekly close is a clear bullish signal — a vast pinbar candle with an 8% wick — indicating the potential for an upside move.
At the time of going to press, the BTC price was $63,232.
Featured image created with DALL E, chart from TradingView.com
