Bitcoin, increase in shorts makes it difficult to break above $ 31,000 | CoinDesk JAPAN | Coin Desk Japan

Bitcoin (BTC) failed to gain a foothold above $31,000 twice this week. Coinalyze data suggests futures traders are holding back the rally.

An unsuccessful first attempt at 8:05pm UTC on July 10 saw the price hit a high of $31,040, before quickly climbing to $30,200 by 9:55pm. retreated to Open interest, or the number of active contracts for stablecoin margin (or linear) futures tied to Bitcoin, climbed from roughly 230,000 BTC to 242,000 BTC as the price fell from $31,040.

An increase in open interest as prices fall is said to indicate an influx of bearish short positions in the market. A short futures position is a bet to profit from a fall in the price of the underlying asset.

“Price action suggests that shorts will build up as we approach $31,000,” cryptocurrency liquidity network Paradigm said in a Market Update released Wednesday, adding that the price of 30,000 is expected to rise. He cautioned that open interest increased when the price turned down from $1,040.

Aggregation of BTC/USDT Perpetual Futures 5-Minute Candle Chart and Stablecoin Margin Contract Open Interest. (Coinalyze)

A similar pattern was seen on Wednesday, when the US consumer price index (CPI) fell short of expectations, weakening the case for continued monetary tightening by the Federal Reserve.

Bitcoin hit a high of $31,000 shortly after the U.S. Department of Labor announced its CPI at 12:30 UTC, but fell to $30,500 within an hour.

The pullback was again accompanied by an increase in open interest in futures trading on stablecoins.

A bearish move near $31,000 highlights the line as an important resistance to watch for in the near term. Bitcoin is trading near $30,350 at the time of writing, according to CoinDesk data.

｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Coinalyze
｜Original: Bitcoin Breakout Above $31K Elusive as Shorts Pile In