February 2, 2023

disclaimer: The findings of the following analysis are the writer’s sole opinion and should not be taken as investment advice

  • Bitcoin market structure has been bullish on the daily chart
  • Risk-averse traders can wait for Bitcoin’s response for the next two days before formulating their trading plans

Bitcoin plunged into an area that the bulls recently turned to support. The weekend saw low trading volume and little volatility. The anticipation surrounding the US Fed rate announcement meant that positive news could signal a small BTC rally.

This idea could be destroyed if the economic news that comes out is even slightly negative, as that could trigger a wave of panic in the market.

Read Bitcoin [BTC] Price Forecast 2023-24

As of November 10, Bitcoin is trading within a range of $15.6k to $17.6k. At the time of writing, the king of crypto hovered near the mid-range. Due to the risky conditions in the coming days, traders may want to wait to overcome the volatility.

The confluence of mid-range and bullish breaker showed Bitcoin could bounce towards $17.6k

Bitcoin traders can keep an eye on these levels from the past week as the price sinks into a demand zone

Source: BTC/USDT on TradingView

The $17.4k and $16.7k levels represent the high and low of last week’s trading, respectively. Meanwhile, the cyan-highlighted region showed a former bearish order block that broke on Nov. 30.

After being beaten, it turned into a bullish breaker and represented a region where buyers were likely to be strong. To complement this idea, the Chaikin Money Flow (CMF) had been above +0.05 for the past few days. This was at a time when Bitcoin was holding the $17,000 mark.

However, it was clear that Bitcoin’s strong downtrend in recent months was still unbroken. In the north, firm resistance levels are at $17.8k and $18.6k. The $18.2k – $18.5k also represented a zone of liquidity where the bears can look to reverse any rallies.

The Relative Strength Index (RSI) recently stood at neutral 50 and the price had no noticeable momentum on the higher time frames. That may change this week. A move back above $17.3k would herald a bullish bias in a lower time frame, and a rise past $17.8k could be used to aggressively take profits. Meanwhile, a drop below $16.6k would likely be followed by another 6% drop to the lows.

Exchange withdrawals reach yearly highs as they fall in November

Bitcoin traders can keep an eye on these levels from the past week as the price sinks into a demand zone

Source: Glassnode

Total on-chain withdrawals from exchanges stood at 106,450 BTC on November 9. Again, on November 14, this stat reached 108,221. Both values ​​are comfortably higher than what Bitcoin reached in 2022. Did this mean that whales were licking the blood in the streets after the collapse of the FTX?

All things considered, the bottom for Bitcoin may or may not have been reached. Traders and investors should still be cautious as the trend in the higher time frame has been bearish. Risk management and capital preservation are extremely important, especially in the depths of a bear market.

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