BTC falls to $26k over the weekend but the bulls could drive a recovery
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 bearish outlook in the near term from the technical indicators
- A weekend dip followed by a Monday recovery was also on the cards, especially after the defense of $24.8k
Bitcoin [BTC] witnessed a bounce from the $24.8k support level on 12 September, but its bullish momentum weakened last week. Over the weekend the price dipped 2% to test the $26k mark, but it could be just a short-term liquidity hunt before another move higher.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Will the Bitcoin bulls see another wave of selling?
A weekend of tepid price action followed by a stop-loss hunt late on Sunday (24 September) and a recovery on Monday (25 September) is a script that has been around for a long time. The same thing could be occurring once more.
Even though the Relative Strength Index (RSI) and the market structure showed bearish strength, a reversal had a good chance to occur. In such a scenario Bitcoin could climb to $28.2k before facing significant resistance.
After the losses of 11 September, Bitcoin dropped to the $24.8k mark, the low of a bullish order block from the 1-day timeframe. This OB has been important since June, and the past ten days saw BTC bounce from this area.
Therefore, the defense of this demand zone was a positive development. The move to $26k likely caught many early bulls offside and also encouraged sellers to go short. Coinglass liquidation data showed $41.45m worth of liquidations in the past 24 hours, with $32m of them being longs.
The decline in spot CVD was a worrisome trend
The Open Interest (OI) chart saw a decline when Bitcoin dipped to $26k. Subsequently, the OI bounced alongside prices and showed short-term bullish sentiment. Yet, it was unclear if the buyers could sustain the rally. The spot Cumulative Volume Delta (CVD) has been in a steady downtrend since 20 September and showed a lack of capital influx in the spot markets.
Is your portfolio green? Check the Bitcoin Profit Calculator
Hence, even though a rally from $26k made sense from a price action perspective, the exchange inflows and the lack of reaction from buyers in the spot market could spell trouble for the BTC bulls.