- Bitcoin flew past October highs,
- A small price drop before the uptrend resumes is the ideal outcome for bulls.
Bitcoin [BTC] has a comfortably bullish outlook, judging by social media posts.
The rapid rise past the $64k resistance level that thwarted the bulls in October was broken on October 14 and the channel highs were tested again.
Record inflows from Bitcoin spot ETFs likely contributed to this 5.1% price move. However, the ETF share is only a fraction of the total trading volume. Should investors brace for a breakout or another rejection?
Channel heights versus range breakout
Source: BTC/USDT on TradingView
BTC traded within a short-term range in October that stretched from $60.2k to $64.1k. Monday’s daily trading session easily beat resistance, but faced resistance around $66.5k.
This coincided with the descending channel highs, as well as the local highs of September 27. A session close above $66.5k would be a sign of strong bullish conviction.
The OBV was unable to reach the local highs and found itself a noticeable distance lower, while the price had the same resistance at $66.5k.
This was a sign that buying volume in recent weeks was not as high as during the sessions when BTC recorded losses.
A potential short squeeze is looming
The one-month lookback period showed a concentration of liquidation levels from $66.6k to $67.4k. The proximity of this liquidity pool could push prices higher before a reversal towards $60,000 occurs.
Read Bitcoin’s [BTC] Price forecast 2024-25
It is unclear whether Bitcoin is ready for the bull run expected in the fourth quarter of 2024, or whether more consolidation lies ahead. Based on the liquidation heatmap and the OBV, a rejection seemed likely.
A bullish reaction could follow the former range highs of $64k and provide a buying opportunity, but swing traders should be prepared for a deeper dip and manage their risk accordingly.
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