Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Bitcoin has a bullish bias, but the lack of demand has been a concern in the short term.
- A small dip below $28,000 could provide a buying opportunity, but traders may want to wait for a retest of key levels to execute their plans.
Bitcoin [BTC] saw increased volatility on Monday (October 16) following false news of a Bitcoin spot ETF approval by the SEC. It was rejected at $30,000 but continued to show signs of another move higher. One of these was the increase beyond the Warm Supply Realized Price.
Read Bitcoin’s [BTC] Price forecast 2023-24
A Bitcoin price report from AMBCrypto last weekend noted that the king coin had a bearish outlook at the time. It also highlighted the $27.2k mark as a key level at which the bulls need to break to turn around their fortunes. With BTC trading at $28.5k, what can we expect from it in the coming weeks?
Will the turn from mid-range resistance to support be crucial for BTC bulls?
Source: BTC/USDT on TradingView
Bitcoin has traded within a range (orange) since mid-June that stretched from $24.8k to $31.8k. The mid-level was at $28.3k, and at the time of writing this level had turned to support. The market structure on the daily time frame was bullish. Moreover, the Relative Strength Index (RSI) was also above neutral 50.
The Directional Movement Index (DMI) showed that both the Average Directional Index (ADX) (yellow) and +DI (green) were above 20, indicating a strong uptrend is underway. Conversely, the Chaikin Money Flow (CMF) fell below -0.05, indicating significant capital flow from the market.
The lack of buying pressure could see BTC consolidate around the $28k-$28.5k region. A scenario where BTC trades sideways in the coming days could give the market time to decide its next move.
The liquidation levels chart indicated that a small pullback could be approaching
Source: Hyblok
The Cumulative Liquidation Levels Delta showed that bears were set to lose more, but the amount of capital was likely not enough to warrant a massive move to punish poorly positioned short sellers. So, a crab market in the coming days or even gradual losses could work in favor of the bulls.
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There were almost $100 million and $250 million in long-term liquidations of $28,000 and $27.76k respectively. A slow decline to these levels could encourage further short selling and increase liquidity in the North. A reversal from these levels to liquidating short positions at $29.3k and $29.8k could then begin.
However, based on the available evidence, Bitcoin maintained a bullish bias on the daily chart but currently lacked demand to justify expectations of a new move towards $30,000.