Bitcoin climbs to $28.5k resistance, here’s why more gains are likely
Based on the evidence at hand Bitcoin maintained a bullish bias on the daily chart, but the path upward might not be linear and could take a while to materialize.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Bitcoin has a bullish bias but the lack of demand was a concern in the short term.
- A minor dip below $28k could offer a buying opportunity, but traders can wait for a retest of key levels to execute their plans.
Bitcoin [BTC] saw heightened volatility on Monday (16 October) after false news of a Bitcoin spot ETF approval by the SEC. It faced rejection at $30k but continued to show signs of another move upward. One of these was its ascent past the Warm Supply Realized Price.
Read Bitcoin’s [BTC] Price Prediction 2023-24
A Bitcoin price report by AMBCrypto from last weekend noted that the king coin had bearish prospects at that time. It also underlined the $27.2k mark as a key level for the bulls to break to turn their fortunes around. Now that BTC is trading at $28.5k, what can we expect from it in the coming weeks?
Will the flip of the mid-range resistance to support be crucial for BTC bulls?
Bitcoin has traded within a range (orange) that extended from $24.8k to $31.8k since mid-June. The mid-range level sat at $28.3k, and at press time this level had been flipped to support. The market structure on the daily timeframe was bullish. Additionally, the Relative Strength Index (RSI) was also above neutral 50.
The Directional Movement Index (DMI) showed both the Average Directional Index (ADX) (yellow) and +DI (green) were above 20 to signal a strong uptrend in progress. Conversely, the Chaikin Money Flow (CMF) dipped below -0.05 to show significant capital flow out of the market.
The lack of buying pressure could see BTC consolidate around the $28k-$28.5k region. A scenario where BTC trades sideways over the next few days could give the market time to decide on the next move.
The liquidation levels chart noted a minor pullback could be approaching
The Cumulative Liquidation Levels Delta showed bears stood to lose more, but the amount of capital was likely not enough to warrant a massive move to punish ill-positioned short-sellers. Hence, a crab market over the next few days or even gradual losses could work in favor of the bulls.
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There were close to $100 million and $250 million in long liquidations at $28k and $27.76k respectively. A slow bleed to these levels could encourage further short-selling and build liquidity northward. A reversal from these levels to liquidate short positions at $29.3k and $29.8k could then commence.
Based on the evidence at hand, though, Bitcoin maintained a bullish bias on the daily chart but lacked demand at the moment to justify expectations of another move toward $30k.
