Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The short-term range presented important levels for traders to watch out for.
- The buyers were not yet in control of Bitcoin’s trend, and this may not change next week.
Bitcoin saw a false break beyond a short-term range following last weekend’s positive developments regarding US debt ceiling talks. The past trading week saw Bitcoin fall back within that range.
Traditional markets have outperformed Bitcoin and Ethereum, especially over the past week. Meanwhile, the higher timeframes showed that BTC was in the throes of bearish momentum. Traders may benefit from a price drop next week.
The bulls have already been trapped once – will this pattern repeat itself?
Source: BTC/USDT on TradingView
The range (orange) has expanded from $26.1k to $27.5k. In the past few days, BTC managed to bounce from mid-point support at $26.8k. The 4-hour market structure was bearish and the RSI showed that momentum was neutral.
The findings of the OBV had more impact. When Bitcoin surged above $28k, the OBV failed to break the resistance level from earlier in May. This suggested that demand was not enough to force a breakout.
Bitcoin was then forced to return. Since the daily time frame showed that momentum was to the downside, traders may be bearishly biased. A liquidity hunt for $28,000 or more for BTC could take place on Monday.
This would likely be followed by a reversal if the lack of demand continues. Meanwhile, a real escape was also possible, one that bears should be careful about. Therefore, the stop-loss can be set near $28.5k, above recent highs.
The rising number of sellers supported the bearish case
Source: Coin analysis
The spot CVD was falling sharply towards the end of May. This trend has also continued in recent days, although the pace has slowed. Overall, it continued to show that selling pressure was dominant.
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The Open Interest has been flat for the past two days and barely moved in the last few hours. This was a sign of sidelined speculators.
They could be tempted to enter long positions on BTC if it breaks $28k. But if the sellers prevailed after that, these late bulls would be a juicy target for the bears.