- Bitcoin has a bullish structure, but failed to sustain the breakout.
- Fears of a local summit due to social media buzz have played a role over the past four days.
Bitcoin [BTC] has broken out of the declining channel it has been trading in since July. However, after reaching the local high of $66.5k, the price started reversing its upward momentum.
In one message on Xcrypto market information platform Santiment noted that audience sentiment was particularly optimistic. This increased the chances of a market top and panic selling if BTC prices fell.
The price drop of almost 5% on Monday confirmed this idea. Is the market ready for a recovery, or was that the local top?
Bitcoin fear and greed index
A look at the fear and greed index showed that market participants need not panic. Current sentiment was neutral and has been neutral or fearful in recent weeks.
The score is calculated based on various data points such as volatility, market volume, social media engagement, and Bitcoin dominance trends and Google Trends scores.
AMBCrypto also analyzed the Bitcoin Fear and Greed Index scores over the past three months. The price development in September, especially the second half, caused the index to rise higher.
This was still not enough to push the market into “greedy” territory.
The failed canal breakout
Source: BTC/USDT on TradingView
The price action since June has been marked by a series of lower highs and lower lows. The most recent lower high at $65k from August 25 was broken, as were the highs of the descending channel.
This outbreak did not last long. Within four days, BTC saw a 4.7% correction to fall back within the range and below the $64k-$66k resistance zone.
Read Bitcoin’s [BTC] Price forecast 2024-25
The OBV has surpassed the August local high, but not by a substantial margin. The failure to push through meant that bulls lacked conviction in the short term and felt more comfortable taking profits.
The DMI had signaled a strong upward trend during the outbreak. The +DI and ADX were both above 20, and still are, but trending lower. It is likely that the $60k-$61.5k will be the next support zone.
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