Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The range formation presented a simple yet strong idea for BTC traders.
- The shrinking spot CVD highlighted the risk buyers take when bidding on the king crypto.
Bitcoin [BTC] saw an extremely strong bullish performance in mid-June. But after a week of gains, the bulls got tired, but not enough to hand over the initiative to the bears. This almost brought their tug-of-war to a halt.
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On the lower time frame charts like H4 or shorter, the price action showed a lot of opportunities for traders to grab. The latter comes after the strong rejection BTC saw at $30.8k.
A retest of the recent lows could offer patient bulls a good risk-reward opportunity
Source: BTC/USDT on TradingView
On the 4-hour price chart, the short-term range that Bitcoin has established over the past few weeks was plotted in orange. It extended from $29.8k to $31.5k. The $29.7k was a likely target for prices to fall to, as it would likely trigger stop-loss orders from buyers and trick early bears into selling BTC. After collecting this liquidity, an upward reversal can begin.
In the early hours of Tuesday, July 11, Bitcoin saw a surge toward the $31,000 mark come to a halt. This was not a good sign for bulls waiting for a move to the range highs, as it emphasized the strength of the bears.
The brief jaunt past $31k served as a liquidity grab before prices reversed their trajectory and once again appeared headed for the lows. At the time of writing, BTC was trading at USD 30.4k, and the RSI showed that the bullish momentum has waned.
The CMF also fell sharply, but remained above +0.05, indicating significant capital inflows. Meanwhile, the DMI showed that no strong trend was underway, reinforcing the idea of a range formation.
Buyers can wait for a retest of the $29.7k – $30k area, with a stop-loss below $29.2k, as that would invalidate the range idea. The target is the range highs at $31.5k.
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The downward trend of the spot CVD could be a concern for short-term buyers
Source: Coin analysis
Long-term investors in Bitcoin need not worry just yet, as the trend has remained bullish. But for short-term traders, the sharp downward trend that spot CVD has been in since July 3 has been worrying. It highlighted the steady selling pressure behind the king of crypto, even as it consolidated around the psychological $30,000 mark.
The jump to $31k on July 10 caused the Open Interest to react positively and show an upbeat conviction from speculators. Although later discouraged, it remained likely that more buyers would be happy to bid for BTC if it saw strong bullish momentum in a lower time frame.