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 lower timeframe structure, but key resistances remain strong overhead.
- The price action outlined a key support region near $26.5k that is crucial for the buyers to defend.
Bitcoin [BTC] posted gains of 8.5% on 29 August and reached $28.1k, but has been pushed back a bit since then. On that day, the market received news that the U.S. Court of Appeals sided with Grayscale in a lawsuit against the Securities and Exchange Commission.
Read Bitcoin’s [BTC] Price Prediction 2023-24
This was good news for investors and can help push institutional adoption in the long term. For the coming weeks, the charts showed that there was significant resistance at the $28.5k and $30k levels.
The recent rejection from $28k could see BTC form a higher low and move upward
The bounce on 29 August occurred from a bullish order block from 14 June, highlighted in cyan. Before that, the price was stuck in limbo at the $26k level, which underlined bearish exhaustion.
In the 1-day timeframe, the market structure remained bearish. While it has managed to breach the $26.6k mark, the more significant lower highs at $29.8k and $30.2k remained unbeaten.
Hence, it was likely that sellers were lined up at that region, and bulls could have a hard time driving prices above it.
Bitcoin appeared to have formed a range between $24.8k to $31.8k. The mid-range mark at $28.4k was also a level that could oppose further gains. The RSI was at 47 and showed the momentum has not shifted wholly bullish. The OBV did not see a notable uptick due to the reduced trading volume in recent weeks.
The lower timeframe market structure shift was positive for BTC bulls, and a retest of the $26.6k-$26.8k area could offer traders a short-term buying opportunity.
Liquidity at $28.5k and $30k meant bulls will have to be careful when BTC nears these levels
MobChart data revealed there were limit sell orders worth 228.5 BTC at the $28.5k level. Another sell wall of 375 BTC was present at $30k. Hence, buyers from the $26k zone can look to take profit at these levels.
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CryptoQuant’s data showed BTC flow out of exchanges intensified over the past two weeks. This was a sign of accumulation of the asset, and was a positive sign in the long term. However, for traders, this does not necessarily mark a long-term bottom.
Bulls must beware of the possibility of another move toward $25k if they are unable to defend the $26.3k-$26.7k region. Aggressive traders can look to enter upon a retest of this zone and a positive reaction.