Disclaimer: The findings in the following analysis are the sole opinions of the author 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 bullish move
Bitcoin faces strong resistance at the $17k mark, which is also a psychological round number. In the last two weeks, this resistance group was not beaten. Higher time frame charts showed that Bitcoin had a bearish bias.
Read Bitcoin Price Prediction 2023-24
There was evidence that investors were accumulating. A recent article highlighted that the outflows of the exchanges reached an all-time high, suggesting that BTC may be close to finding a bottom.
While the bottom was probably close in terms of price, it may not be close in terms of time. This means that BTC can trade sideways on the price charts for many more months, and participants must prioritize surviving the bear market.
Bitcoin struggles to breach $17k as volatility eases
Bitcoin has been extremely volatile in November. The first ten days of the month saw BTC drop from $21.5k to $15.5k. Since that fall, BTC revisited these lows on November 22nd. Then the price jumped to trade to $16.5k.
Bitcoin bulls attempted to break past the $17k mark but were met with rejection each time. This was also seen in the last few days, when an increase from $15.5k to $16.8k was abruptly stopped. The price also formed a narrowing pattern on the shorter time frame charts.
The RSI climbed back above neutral 50, but that does not imply bullishness in itself. Based on the price action, the conclusion was that BTC has no strong lower timeframe trend. It has traded within a symmetrical triangle pattern (orange). Meanwhile, the CMF continued to move below -0.05 to highlight strong selling pressure.
To turn the market structure bullish on the 1-hour chart, BTC needs to climb back above $16.7k and $17k, which are the two key levels of imminent resistance.
Open interest is relatively flat as traders wait for a strong trend
While Bitcoin wandered from $15.5k to $17k, open interest remained flat over the past two weeks. This showed that futures traders can wait for a strong upward movement before entering the markets.
An increase in OI in the coming days can follow a strong price movement in both directions. 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, suggesting that a large proportion of futures market participants had negative sentiment. Therefore, any move towards $17k-$17.2k could quickly reverse in an attempt to hunt for liquidity before another drop. Traders may want to wait for a retest of the $17k region as support before considering buying.