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Bitcoin (BTC) showed strength on Oct. 4 and 5, posting a 5% gain on Oct. 5 and breaking through the $20,000 resistance. The move liquidated $75 million worth of leverage short (bear) positions and it led some traders to predict a potential rally to $28,000.

As described by Moustache, the descending channel continues to exert its pressure, but there could be enough strength to test the upper channel trendline at $21,500. The price action coincided with improving conditions for global equity markets on Oct. 4, as the S&P 500 index gained 3.1% and the tech-heavy Nasdaq Composite rallied 3.3%.

Curiously, the sentiment improvement happened while the United States job openings dropped by 1.1 million in August, according to the U.S. Labor Department. The decline was the largest since April 2020 and signaled the U.S. Federal Reserve’s aggressive contractive monetary policy could end sooner than expected.

The overall bullish sentiment might have caused Bitcoin to break the $20,000 resistance, but that does not mean professional investors are comfortable at the current price levels.

Margin traders did not increase their longs despite the rally

Monitoring margin and options markets provide excellent insight into how professional traders are positioned. Margin trading allows investors to borrow cryptocurrency to leverage their trading position. For example, one can increase exposure by borrowing stablecoins to buy an additional Bitcoin position.

Bitcoin (BTC) holding $19,000 could be more important than traders realize, new data reveals.

In the latest edition of its monthly report series, “The Bitcoin Monthly,” investment management firm ARK Invest flagged an ongoing battle for the defense of Bitcoin’s investor cost basis.

Bitcoin investor cost basis buoys market

Bitcoin price action is currently characterized by volatile moves within a clearly defined range only around $4,000 across.

Having held since June, this range contains what immediately stands out as a focal point — the prior halving cycle’s all-time high of $20,000.

With BTC/USD crossing that threshold frequently, however, traders have long sought alternative lines in the sand when it comes to new trends for the pair.

Bitcoin (BTC) held $20,000 into Oct. 5 with trader targets still including a fresh high before rejection.

$21,000 upside target to precede new lows

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $20,470 on Bitstamp overnight before returning lower.

The pair succeeded in maintaining the 2017 old all-time high as support, something on-chain analytics resource Material Indicators had hoped would endure as a positive sign.

“BTC is still in a congested range,” it summarized in comments the day prior:

“The retest of technical resistance at the 50-Day MA was rejected. Now I want to see a retest of support at the 2017 Top. Bulls may be losing momentum, but placed a buy wall at $20k to hold price up.”