Bitcoin Price Prediction: Professional Traders and Retail Investors at Odds, 116,000 Resistance Battle to be Revealed This Week

The price of Bitcoin faced strong resistance at $116,000, and long positions may have to wait until Wednesday when The Federal Reserve (FED) announces its interest rate decision and after the mid-week China-U.S. trade summit for a breakthrough. The market shows a clear “ping-pong” trend, with professional traders diversifying funds into the price rally, while retail investors are buying the dips in the spot market, but they are continuously being liquidated in the futures market.

116,000 USD resistance wall, multiple sell orders stacked layer by layer

(Source: TRDR)

Data from TRDR shows that sellers have kept the recent intraday breakout limited to above $116,000, while the order book data from Binance and the largest compliant cryptocurrency exchange in the U.S. reveals a more detailed resistance structure. The spot market of the largest compliant cryptocurrency exchange in the U.S. has a clear sell wall at $116,000, while the selling pressure on Binance is distributed between $117,000 and $118,000. This multi-layered resistance zone indicates that even if breaking through $116,000, long positions will still face subsequent selling pressure.

The order book chart shows that due to the increased possibility of breaking through the resistance level, futures traders have lowered their selling prices to between 115,000 and 116,000. This behavior reflects the cautious attitude of the bears, as over 49.83 million in short positions have been liquidated in the past 12 hours, indicating that many short sellers were forced to close their positions as Bitcoin approached the resistance level. This short liquidation should have provided upward momentum for the price, but the selling pressure at 116,000 remains strong, showing that the strength of the spot sell orders outweighs the driving force of the derivative liquidations.

From a technical perspective, $116,000 is not only a psychological barrier but also a key confluence point for previous highs and Fibonacci retracement levels. After Bitcoin reached an all-time high of $126,080 on October 6, it experienced a sharp correction, with prices briefly dropping below $108,000 on October 10 due to sell-offs triggered by Trump's tariff policies. From a technical analysis standpoint, $116,000 roughly corresponds to the 50% Fibonacci retracement level from the high to the low, and this level often becomes a key judgment point for trend reversals or continuations.

If the daily closing price can stabilize above $116,000, it will confirm that long positions have regained control of the market, with the next target aiming for $120,000 and even challenging the previous high of $126,080. Conversely, if there are multiple failed attempts and it falls below the $110,000 resistance, it could trigger a new round of technical sell-offs, with targets looking down to the $105,000 to $107,000 range.

Market Structure Divergence: Professional Investors Diversifying, Retail Investors Buying the Dips

(Source: Hyblock)

Hyblock's data reveals a striking phenomenon in the current market: large-scale investors (ranging from 1 million to 10 million USD) are continuously selling off as prices rise, while retail investors (with order sizes between 1,000 to 10,000 USD) are counter-trend buying the dips. This kind of market structure divergence has appeared multiple times in the history of cryptocurrencies, often signaling intense fluctuations in the short term.

There are multiple reasons for the diversification behavior of professional investors. Firstly, these large players may have accumulated positions significantly below $108,000, and when the price rebounds to the range of $112,000 to $115,000, they have already gained considerable profits, choosing to take profits in batches aligns with professional risk management principles. Secondly, in the face of two major uncertainty events—the FOMC meeting on Wednesday and the China-US summit on Thursday—institutional investors tend to reduce their positions to avoid risk. Finally, orders exceeding $1 million often come from quantitative funds and market makers, whose trading strategies may involve cross-market arbitrage or hedging, and selling Spot may be accompanied by long positions in futures or options combinations.

In contrast, retail investors' Buy the Dips behavior is largely based on faith and FOMO (fear of missing out). The inflow data for the Spot Bitcoin ETF supports this observation. Over the past three trading days, the net inflow into the ETF reached $260.23 million, with a single-day inflow on October 21 reaching as high as $477 million, when the BTC price had just fallen below $108,000. ETF investors are mainly retail and small institutions, and this influx of funds indicates that the Buy the Dips strategy still dominates at the retail level.

However, the performance of retail investors in the futures market is entirely different. Hyblock's actual retail long and short account indicators show that Binance's short positions are on the rise. This contradictory behavior reflects the speculative nature of retail investors: buying “digital gold” in the spot market as a long-term investment, while attempting to short through leverage in the futures market to earn short-term profits. Unfortunately, the current liquidation heatmap indicates that a batch of leveraged longs worth between $112,000 and $113,000 is being liquidated, suggesting that many retail investors' leveraged longs have become casualties amid price fluctuations.

Currently, the total order book buy-sell ratio of Hyblock (set at 10% depth) shows a larger selling volume on the order book, which is consistent with the price hovering at the resistance level. This market structure suggests that the Bitcoin price may continue to “ping pong” between $110,000 and $116,000 before the key events of this week are revealed.

Open interest has rebounded but is still some distance from the peak

(Source: Coinglass)

Although it is difficult for long positions to push Bitcoin above $116,000, there are some positive signals in the data. The global exchange open interest has rebounded from a low of $28.11 billion on October 11 to $31.48 billion, an increase of about 12%. This rebound indicates that confidence in the futures market is recovering, and traders are willing to re-establish positions.

However, compared to the 40.39 billion USD in open contracts when the Bitcoin trading price was 124,600 USD, the current open contracts still show a considerable gap (about a 22% reduction). This discrepancy indicates that the leverage multiple and market participation have not fully recovered. In a bull market, open contracts typically rise in tandem with prices or even lead the increase, but the current lag shows that cautious sentiment still persists in the market.

The recovery speed of open contracts will be a key indicator for determining trend strength. If this week's FOMC meeting and the China-US summit release positive signals, pushing Bitcoin to break through $116,000, while open contracts quickly rebound to over $35 billion, it will confirm the start of a new bullish cycle. Conversely, if open contracts stagnate or even decline, even if the price briefly breaks through resistance, it may be a lack of sustainability and a false breakout.

FOMC interest rate cut expectation of 25 basis points and the dual test of the China-US summit

From the perspective of day trading, some investors are reducing their risk exposure before the Federal Reserve's Federal Open Market Committee (FOMC) announces its interest rate decision on Wednesday. Although the Federal Reserve is expected to lower the benchmark interest rate by 25 basis points, it has become a common phenomenon in the cryptocurrency market for traders to adjust their positions before the announcement.

A 25 basis point rate cut should be positive for risk assets like Bitcoin, as lower interest rates reduce the opportunity cost of holding cash and encourage funds to flow into high-yield assets. However, the market is more focused on comments from Federal Reserve Chairman Powell at the press conference, particularly regarding the future path of interest rate cuts and inflation outlook. If Powell suggests that the rate cut cycle is nearing its end or that inflation remains resilient, it could trigger a sell-off in risk assets.

FOMC Possible Scenario Analysis:

Dovish Scenario (Bullish): Interest rate cut of 25 basis points + hinting at 1 to 2 more cuts in the future → Increased probability of Bitcoin breaking through 116,000 USD

Neutral Scenario: Interest rate cut by 25 basis points + future depends on data → Bitcoin maintains fluctuations

Hawkish Scenario (Bearish): Rate cut of 25 basis points + Emphasis on inflation risks → Bitcoin may retest the support at $110,000

A larger risk event is the meeting between U.S. President Trump and Chinese leaders on Thursday. If the “Trump-Xi meeting” negotiations break down for some reason, or if the market believes that the final trade agreement is unfavorable to the U.S. and global markets, the stock market and cryptocurrency market may be negatively impacted. Trump previously announced a 100% tariff on Chinese imports, which triggered the market panic on October 10. If this week's summit can reach a substantial agreement, reduce tariffs, or establish a more stable trade framework, it will eliminate the sword of Damocles hanging over the market.

Before this week's Federal Open Market Committee meeting and the resolution of the China-U.S. trade agreement, Bitcoin prices seem to continue to “ping pong” between the resistance level of $116,000 and the support level of $110,000. This range-bound fluctuation provides short-term traders with opportunities to Buy the Dips, but also increases the risk of leveraged positions being liquidated.