Bitcoin’s current sentiment seems to be predominantly positive, as evident from various social media interactions.
The recent breakthrough above the resistant level of $64k, which had been a challenge for the bulls throughout October, occurred on the 14th of October, leading to a retesting of the channel’s highs.
This remarkable surge in Bitcoin’s price, possibly catalyzed by the record-breaking inflows into Bitcoin spot ETFs, resulted in a 5.1% price increase. Nevertheless, it is essential to note that the ETF’s impact on the overall trading volume is relatively limited. Hence, investors must stay vigilant for a potential breakout or a retraction.
Distinguishing Channel Highs from Range Breakout
In October, BTC was mostly trading within a range of $60.2k to $64.1k. On Monday, the daily trading session successfully surpassed the resistance level but encountered a stumbling block around $66.5k.
This price point aligned with the peak of the descending channel and the local highs observed on the 27th of September. A closing session above $66.5k might indicate a robust bullish momentum.
Observationally, the On-Balance Volume (OBV) failed to breach the former local highs, remaining notably lower, despite the price grappling with the $66.5k resistance. This discrepancy suggests that the buying activity in recent weeks might not be as potent as during bearish sessions.
Imminent Possibility of a Short Squeeze
An examination of the liquidated positions over the last month revealed a clustering around the $66.6k to $67.4k range. This cluster’s proximity could potentially drive the prices higher before a subsequent retreat towards $60k.
The future trajectory of Bitcoin remains ambiguous, with uncertainties persisting regarding the anticipated bull run in Q4 2024 or the likelihood of further consolidation. Considering the liquidation heatmap and OBV readings, a rejection scenario seems plausible.
If a bullish reversal occurs, it could target the previous range resistance at $64k, presenting a viable buying opportunity. However, prudent risk management is advised for swing traders in anticipation of a potential deeper retracement.
Disclaimer: The views expressed do not constitute any form of financial, investment, or trading advice and are solely the author’s personal perspective.