Bitcoin [BTC] unable to breach $29.8k: Where does the next support zone lie
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- Short-term selling pressure saw Bitcoin fall beneath the $29k mark.
- The bullish order block from 2 May could see a positive reaction from the bulls.
At press time, Bitcoin [BTC] faced intense selling pressure beneath the $30k round-number resistance. While the bulls have not yet flipped this area to support, they have also slowly pushed BTC upward since mid-April. The daily timeframe market structure was bullish, but the lower timeframes showed a drop in prices was likely.
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While the higher timeframes can give bulls some hope, on the lower timeframes, the sellers had a clear advantage. The rejection at a bearish order block meant that the next bearish target was below $28k.
The break in structure handed the short-term bears a strong advantage
A bearish order block on the two-hour chart was highlighted in red in the chart above. It was respected over the past two days as BTC bulls were unable to drive prices past the $29.6k level. The rejection saw BTC fall to $28.6, thereby breaking the market structure and flipping it bearish.
The Awesome Oscillator formed green bars on its histogram over the past 12 hours to indicate waning bearish momentum. This corresponded to BTC’s bounce from $28.6k during this time. At the time of writing, Bitcoin was changing hands at $28,871, measuring a near 2% bounce from the $28.3k local lows.
The OBV saw a sharp fall over the past two days to show strong selling pressure. Combined with the break in the market structure, it was likely that Bitcoin was headed lower once more. Beneath the $28.7k support sat the bullish order block at $27.7k. A retest of this region can provide a bullish reaction on the price charts.
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Open Interest showed bearish sentiment was rising
The funding rate dipped into negative territory on 6 May and ventured there once again at the time of writing. Meanwhile, the Open Interest has been falling following BTC’s failure to breach the $29.8k region on 6 May.
The break in the lower timeframe market structure was a development that could see BTC fall once again. The negative funding rates showed short positions were in the majority and the OI also pointed toward short-term bearish sentiment.