Disclaimer: The information presented does not constitute financial, investment, trading or other advice and solely reflects the opinion of the author.
- The move higher was accompanied by a sharp rise in OI.
- Longer term sentiment remained bearish.
Democrats and Republicans reached an agreement in principle during negotiations on the US debt ceiling on Saturday. This was good news for the market as it averted the catastrophe of a US debt default.
Read Bitcoins [BTC] Price prediction 2023-24
This seemed to cheer market participants. Likewise Bitcoins [BTC] Prices went from $26.6k to $27.2k. We say “pump,” but over a weekend, the price rose just 2.7%. Will the bulls be able to recoup losses from earlier in the month?
Bitcoin is experiencing a short-term range formation below resistance
Source: BTC/USDT on TradingView
Bitcoin has been trading below the $27.8K resistance level for over two weeks. This was a key resistance level in early April due to its importance. The price also repeatedly tested this level as support in late April and early May.
Eventually buyers gave in and resistance ensued. At the time of writing, the two levels to watch for on the lower timeframes were the $27.8K resistance and the $26K level. A range (orange) was spotted ranging from $26.1K to $27.6K.
The RSI sat in overbought territory on the 2-hour chart after BTC surged above the mid-$26.8K level. While this was a sizeable move within the range, the overall picture showed that the bears still had the upper hand.
A look at the daily and 4-hour charts revealed a bearish market structure. This would turn in a bullish direction on a move above $27.8k – however traders need to be wary of liquidity hunts in the $28k area. Bitcoin could take a few trading days to see acceptance above $28,000. Until then, buyers can remain cautious about the market’s intentions.
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A strong performance by bullish speculators highlighted sentiment
Source: Coinalyze
Bitcoin’s 2.7% gain led to nearly $400 million in open interest gains. The rise in OI along with rising prices indicated that speculators were mostly optimistic. The funding rate has declined over the past few hours but has remained positive.
Overall, a move in the $27.6k to $28k range was possible. Still, it remains likely that Bitcoin will face rejection and a trend reversal on the price charts from then on.
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