warning: The results of the following analysis are the author’s opinions only and should not be considered investment advice
- Bitcoin managed to recover and climb back above the $16.2K level
- However, there was no promise of an imminent upward movement
Bitcoin faces strong resistance at $17k, which is also a psychological round number. In the past two weeks, this opposition group has not been beaten. The higher time frame charts showed that Bitcoin has a bearish bias.
Read Bitcoin Price Prediction 2023-24
There was evidence that investors were piling on. A recent article highlighted that exchange outflows are at an all-time high, suggesting that Bitcoin may be close to finding a bottom.
While the bottom was likely close in terms of price, it may not be close in terms of time. This means that BTC may trade sideways on the price chart for several more months, and participants should prioritize surviving the bear market.
Bitcoin struggles to break $17k as volatility subsides
Bitcoin was wildly volatile in November. The first ten days of the month saw BTC drop from $21.5K to $15.5K. Since that fall, BTC has bottomed again on November 22nd. After that, the price rebounded to $16.5000.
Bitcoin bulls tried to surpass the $17,000 level, but were rejected each time. This was also seen in the past few days, when an increase from $15.5k to $16.8k was suddenly halted. The price has also formed a contraction pattern on the shorter time frame charts.
The RSI rose back above the neutral 50, but that does not mean an uptrend by itself. Based on the price action, the conclusion was that BTC does not have a strong trend in the lower time frame. It is trading within a symmetrical triangle (orange) pattern. Meanwhile, CMF continued to move below -0.05 indicating strong selling pressure.
To turn the market structure into an uptrend on the 1-hour chart, BTC would need to rally again above $16.7K and $17K, which are the two key levels of imminent resistance.
Open interest is relatively unchanged as traders await a strong trend
While bitcoin has wandered from $15,5000 to $17,000, open interest has remained steady over the past two weeks. This showed that futures traders might be waiting for a strong move to the upside before entering the markets.
A higher OI in the coming days could be accompanied by strong price action in either direction. Therefore, a move above $17K with an increase in OI would be a bullish scenario to watch out for.
The funding rate was negative on Binance, which indicates that a large percentage of participants in the futures market have a negative sentiment. Therefore, any moves towards $17K-$17.2K could quickly reverse in an effort to hunt for liquidity before another drop. Traders may want to wait for a retest of the $17K area as support before considering buying.