The past week Bitcoin has experienced a 28% increase from low to high with the current number sitting at 20%. The rally was sparked by some fake news that Blackrock’s BTC ETF had been approved and while investors realized shortly after that it was fake, price still held up relatively well.
Since then, the DTCC has listed Blackrock’s BTC ETF, ticker symbol IBTC, which has sparked further confidence that it could be approved any day now.
While this seems like very bullish news for crypto, I am yet to be convinced that this is the catalyst that sparks the new bull market.
Since October 13 we have seen Bitcoin rally 35% with no real pullback so the further price appreciates the more likely we are to see a correction.
Additionally, if we look at HTF liquidation levels we can see that there is a large pool of liquidity resting around 24k with very little above price. The liquidity that was above price earlier on in the week has already been taken out from our most recent run up.
Another metric we can look at is the correlation between volume and open interest. As we can see in the image below, we had a large volume spike around the 34k area which was made up nearly entirely from buys. If we look deeper, we can see that open interest decreased telling us that this rally came from short positions closing instead of new buyers entering the market.
On top of that I have had my eyes on the 34.2-37.4k level to provide a price reversal for quite some time. Back in May 2022 we created a sellside imbalance on the weekly timeframe and our recent rally has seen price reject from the halfway point of this area at the around the 36k level. This also lines up with a prior imbalance and the midpoint of a bearish breaker. Seeing the midpoint of these levels act as resistance gives me confidence of a potential reversal.
Of course, we can always speculate on the current psychological state of market participants with the majority being bullish due to recent news events. Whenever we see the market overly bullish, the opposite usually happens.
I am personally expecting a reversal but currently watching and waiting for confirmation. If price can push through 38k and hold, ill be impressed. If we break down from here, we could see a new long term downtrend form.
The past week Bitcoin has experienced a 28% increase from low to high with the current number sitting at 20%. The rally was sparked by some fake news that Blackrock’s BTC ETF had been approved and while investors realized shortly after that it was fake, price still held up relatively well.
Since then, the DTCC has listed Blackrock’s BTC ETF, ticker symbol IBTC, which has sparked further confidence that it could be approved any day now.
While this seems like very bullish news for crypto, I am yet to be convinced that this is the catalyst that sparks the new bull market.
Since October 13 we have seen Bitcoin rally 35% with no real pullback so the further price appreciates the more likely we are to see a correction.
Additionally, if we look at HTF liquidation levels we can see that there is a large pool of liquidity resting around 24k with very little above price. The liquidity that was above price earlier on in the week has already been taken out from our most recent run up.
Another metric we can look at is the correlation between volume and open interest. As we can see in the image below, we had a large volume spike around the 34k area which was made up nearly entirely from buys. If we look deeper, we can see that open interest decreased telling us that this rally came from short positions closing instead of new buyers entering the market.
On top of that I have had my eyes on the 34.2-37.4k level to provide a price reversal for quite some time. Back in May 2022 we created a sellside imbalance on the weekly timeframe and our recent rally has seen price reject from the halfway point of this area at the around the 36k level. This also lines up with a prior imbalance and the midpoint of a bearish breaker. Seeing the midpoint of these levels act as resistance gives me confidence of a potential reversal.
Of course, we can always speculate on the current psychological state of market participants with the majority being bullish due to recent news events. Whenever we see the market overly bullish, the opposite usually happens.
I am personally expecting a reversal but currently watching and waiting for confirmation. If price can push through 38k and hold, ill be impressed. If we break down from here, we could see a new long term downtrend form.