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Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer
- Bitcoin has a bearish outlook in the near term based on the technical indicators
- A weekend dip followed by a recovery on Monday was also on the cards, especially after defending $24.8k
Bitcoin [BTC] witnessed a rebound from the $24.8k support level on September 12, but the bullish momentum weakened last week. Over the weekend, the price fell 2% to test the $26,000 mark, but it could only be a short-term liquidity chase before another surge occurs.
Read Bitcoin’s [BTC] Price forecast 2023-24
A recent report found that BTC inflows have spiked and the sell-off could continue. Long-term investors remained strong and saw their numbers increase over a longer time horizon.
Will Bitcoin Bulls See Another Selloff?
Source: BTC/USDT on TradingView
A weekend of tepid price action, followed by a stop-loss chase late Sunday (September 24) and a recovery on Monday (September 25) is a script that has been around for a long time. The same thing could happen again.
Although the Relative Strength Index (RSI) and market structure showed bearish strength, there was a good chance that a reversal would occur. In such a scenario, Bitcoin could rise to $28.2k before significant resistance emerges.
After the September 11th losses, Bitcoin fell to $24.8k, the low of a bullish order block from the one-day period. This OB has been important since June, and the past ten days saw BTC bounce out of this area.
Therefore, the defense of this demand zone was a positive development. The move to $26k likely sidelined many early bulls and also encouraged sellers to go short. Mint glass liquidation details showed $41.45 million in liquidations in the past 24 hours, of which $32 million were longs.
The decline in spot CVD rates was a worrying trend
Source: Coinalyse
The Open Interest (OI) chart saw a decline as Bitcoin fell to $26,000. Subsequently, the OI bounced along with prices and showed bullish sentiment in the short term. Still, it was unclear whether buyers could sustain the rally. The Spot Cumulative Volume Delta (CVD) has been in a steady downward trend since September 20, showing a lack of capital inflows in the spot markets.
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While a rally from $26,000 made sense from a price action perspective, the inflows from the currency markets and the lack of response from buyers in the spot market could spell trouble for the BTC bulls.