Bitcoin: The curious case of the weekend’s pump

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The move upward was accompanied by a large OI uptick.
• The longer-term sentiment remained bearish.

Saturday’s US debt ceiling negotiations saw Democrats and Republicans reach a deal in principle. This was good news for the market as it averted the disaster of a US debt default.

Read Bitcoin’s [BTC] Price Prediction 2023-24

This appeared to cheer up market participants. Likewise, Bitcoin’s [BTC] prices pumped from $26.6k to $27.2k. We say pump, but it was only a 2.7% move higher on a weekend. Will the bulls be able to reverse the losses seen earlier this month?

Bitcoin witnesses a short-term range formation beneath resistance

Source: BTC/USDT on TradingView

For over two weeks, Bitcoin has traded beneath the $27.8k resistance. This was a major resistance level because of its importance in early April. The price retested this level as support multiple times in late April and early May as well.

Eventually the buyers succumbed, and it was flipped to resistance. At the time of writing, the two levels to watch out for on the lower timeframes were the $27.8k resistance and the $26k level. A range (orange) was spotted that extended from $26.1k to $27.6k.

The RSI was in the overbought territory on the 2-hour chart after BTC climbed above the mid-range mark at $26.8k. While this was a sizeable move within the range, the larger picture showed that bears still had the upper hand.

A look at the daily and 4-hour charts showed a bearish market structure. This would be flipped in bullish favor upon a move above $27.8k- but traders must beware liquidity hunts in the $28k area. It could take a few days of trading for Bitcoin to see acceptance above $28k. Until then, buyers can remain cautious of the market’s intentions.

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A strong performance from bullish speculators made sentiment clear

Source: Coinalyze

Bitcoin’s gains of 2.7% saw nearly $400 million added in Open Interest. The surge in OI alongside rising prices showed the speculators were predominantly bullish. The funding rate dipped in recent hours but remained positive.

Overall, a move to the $27.6k-$28k region was possible. Yet, it remained likely that Bitcoin would face rejection and a reversal on the price charts from there on.