برچسب: Crypto

• Bitcoin’s price correction has the potential to continue, as the daily MACD formed a signal that has consistently indicated short-term bearish dominance.
• Rising leverage and funding rates reflect growing speculative interest but increase the risk of liquidation cascades if major support levels give way.
• Wallets holding 100-1,000 BTC led Bitcoin accumulation over the last three months, indicating a potential bullish trend over the next 6-12 months.

Weekly outlook

Could a V turn into a W?

Over the past week, Bitcoin has displayed a V-shaped price movement, consolidating within a narrow range between $66,700 and $67,700 before briefly testing both $65,300 and $69,000. In our previous analysis, we highlighted that Bitcoin could see imminent correction and/or consolidation throughout last week, as bullish momentum appeared to weaken.

On the 4-hour chart, the RSI indicator remains in a downtrend (cyan line), suggesting the corrective phase may not be over. At the time of this writing, Bitcoin’s price is trading within the Ichimoku Cloud, with its upper and lower boundaries acting as resistance and support, respectively — indicating market indecision. A breakout outside this cloud could determine whether Bitcoin tests $69,500 or retreats to lower levels. 

While a short-term recovery is possible, it may struggle to gain traction unless the RSI breaks through its resistance. VPVR analysis shows high volume clusters around the 0.236, 0.382, and 0.618 Fibonacci retracement levels, suggesting these as key support/resistance zones.

The daily chart indicates a possible continuation of the correction, as the asset formed a bearish divergence with Awesome Oscillator (AO), and a bearish crossover with MACD. Over the last 8 months, the latter typically coincided with local tops (red circles), hinting at short-term bearish dominance. This could push the price below the 20-day EMA, with the 200-day SMA as a potential target. However, the 20-day EMA, near $66,000, remains a key support for bulls; defending this level could weaken the bearish case.

Futures market speculations are getting riskier

Last week, we noted that spikes in Bitcoin open interest often precede short-term corrections. Following the recent jump, Bitcoin’s futures open interest dropped by 7%, while futures volume remained relatively flat. Meanwhile, funding rates have risen on average, and the estimated leverage ratio has jumped to its highest level since August 2023. This increase in leverage suggests heightened speculative optimism but raises the risk of sharp liquidation cascades.

These conditions suggest that Bitcoin could see increased volatility in the short term. A breakdown below the 20-day EMA or other major support levels could trigger increased liquidations, potentially exerting additional downward pressure and potentially intensifying a corrective phase.

Source: CryptoQuant

Longer-term outlook

Sharks return to the tank

Bitcoin whale activity is intensifying, with whale numbers reaching their highest since January 2021, while whale accumulation levels are at a peak not seen since July 2020. Examining holder cohorts reveals that “sharks” (wallets holding 100-1,000 BTC) have led the recent accumulation, collectively adding over 200,000 BTC in the past three months. Historically, such accumulation by sharks has preceded prolonged bullish rallies, as similar patterns were seen roughly six months after the halvings in both 2016 and 2020, before further upward price movement.

Source: Checkonchain

Revived supply shows bullish signs

Bitcoin wallets with a 2-4 year holding period are increasingly active, now representing about 42% of the recently revived supply, up from 29% three months ago. In past cycles, rising activity among these holders has often foreshadowed a rally, as they tend to become increasingly active 6-12 months before the cycle peak.

Source: Checkonchain

Short-term holders gain momentum

​​Long-term holders (LTH) have added around 1,000,000 BTC over the past three months, either through accumulation or by transitioning to LTH status, and now control over 70% of Bitcoin’s supply. However, over the last two weeks, short-term holders (STH) have been increasing their share of the supply, potentially signaling an upward move. Historically, STH accumulation increases during bull markets (green circles). The current supply distribution between STH and LTH mirrors the 2013 rally, where rapid price gains were followed by a 10-month consolidation before another rally.

Source: Checkonchain

Conclusion

Bitcoin’s price held largely to our neutral outlook from last week, remaining within a narrow range. This week could bring heightened volatility, with bears potentially challenging the 200-day SMA. While a rebound is possible, it may be short-lived unless Bitcoin breaks decisively above $70,000, which would likely require a fresh catalyst. Despite near-term uncertainty, the long-term outlook remains bullish, indicating a potential new all-time high could be approaching.

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• Bitcoin failed to break its all-time high last week amid increased profit-taking from short-term holders, but could be poised to challenge this level soon.
• Bitcoin showed double-digit weekly gains immediately after the ATH breakout in previous cycles, suggesting that this event could be accompanied by increased volatility.
• Bitcoin now appears to be more in line with previous cycles, approaching the level where a significant upward trend unfolded.

Weekly outlook

Consolidation before a breakout?

Over the past week, Bitcoin’s price has been flirting with its all-time high (ATH), coming within less than $200 of reaching it. However, Bitcoin failed to break it, consolidating around $73,000, and then dropping to the ascending support line (white line). Declining volume during this phase, highlighted by a symmetrical triangle on the Volume Oscillator, hints at an upcoming strong directional move in both price and volume.

According to VPVR analysis, the closest significant volume clusters are located at $66,500-$68,000 (orange) and $72,000-$72,700 (green). This suggests that Bitcoin could see possible support and resistance in these areas if the asset price bounces off or drops below the ascending support line.

Nevertheless, it is not uncommon for Bitcoin to consolidate near its previous ATH before breaking it decisively. In 2020, for instance, Bitcoin initially stalled near $20,000 before breaking through after a week of consolidation. 

Bitcoin’s price is currently approaching its 20-day EMA (yellow line), a dynamic support level for bullish sentiment, indicating that this pullback could be a healthy setup for the next ATH test. Furthermore, the 50-day and 200-day SMAs formed a golden cross (green circle), typically a bullish signal. 

Meanwhile, the daily MACD is again on the verge of a bearish crossover, indicating potential downward movement. However, this signal could be considered only if bulls fail to defend the 20-day EMA.

The power of the ATH breakout

Historically, breakouts above ATH levels have been followed by sharp swings in Bitcoin’s volatility:

• January 2017 ($1,500 breakout): A 10% weekly drop, followed by a 12% weekly increase.
• December 2020 ($20,000 breakout): A 22% weekly increase, with sustained double-digit gains in the following weeks.
• March 2024 ($69,000 breakout): A 9% weekly increase, though momentum gradually slowed.

One of the catalysts behind this is that Bitcoin’s approach to ATH levels typically brings an increase in search interest (green circles) and media coverage, amplifying attention on the cryptocurrency. While current search levels are relatively low, a renewed rally could re-engage public interest, though this effect might be somewhat muted given the ATH was already reached earlier this year.

Source: Google Trends

Profit-taking by short-term holders

As Bitcoin approached its all-time high, the Short-Term Holder (STH) Realized Profit/Loss Ratio surged to a historic peak, reflecting that recent buyers were taking profits. This level of profit-taking might have acted as a resistance, temporarily holding back Bitcoin from breaking its ATH. However, these dips could attract new buyers, helping sustain market liquidity and supporting future upward momentum.

Source: Checkonchain

On the other hand, long-term holders (LTH) have shown more restraint, with only a modest increase in profit-taking. This indicates confidence in Bitcoin’s longer-term potential, as LTHs likely wait for more substantial price signals or higher levels before selling.

Source: Checkonchain

What’s on the radar?

• U.S. elections (November 5): With slim margins between candidates, heightened tension around the election results could introduce short-term volatility in the market. This event might also serve as a trigger for cautious investors waiting on the sidelines to enter the market, potentially boosting market volume shortly after. However, the broader outlook is likely to remain stable regardless of the winner, with increasing signs of a post-halving rally appearing.
• Federal Reserve meeting (November 6-7): According to FedWatch, two 25 bps rate cuts in November and December are still the most anticipated outcome. Consequently, this week’s decision may have a limited impact on prices unless the Fed makes an unexpected move. Comments from Fed Chair Jerome Powell will likely be a more impactful factor, especially following Friday’s U.S. non-farm payrolls data, which revealed the weakest job growth since late 2020, along with downward revisions to previous months’ figures.
• ETF inflows: U.S. spot Bitcoin ETFs reported their largest weekly inflow since March 2024, totaling $2.2 billion. Although these ETFs were only launched in January, notable inflows typically precede price corrections or tapering net inflows. However, this week may be an exception, falling into a “boom or bust” category, as participants could both be extra cautious amid the U.S.-related events, or find the trigger that might have limited previous inflows.

Source: SoSoValue

Longer-term outlook

When Bitcoin reached a new all-time high in March 2024, it marked the first time the asset updated its cycle peak just before a halving event. Typically, Bitcoin approaches the 0.382 Fibonacci retracement level around the halving period. However, in 2024, it was near the 0.786 Fibonacci level, hitting this mark approximately six months earlier than usual.

Earlier this year, this unusual scenario caused some indicators to turn “weird,” leading to deviations from past cycle patterns. However, after 8 months of consolidation, Bitcoin now appears more in line with previous cycles. For instance, Bitcoin has surpassed its previous cycle peak and is testing its ATH around the same time as in previous cycles (white arrows). Additionally, the weekly MACD recently formed a bullish crossover (green circle) near the ATH, a pattern that has historically preceded classic post-halving bull runs.

Conclusion

With Bitcoin hovering near its all-time high, the market seems poised for a decisive move. Short-term holders taking profits temporarily capped gains, but technical indicators suggest the bullish potential if the 20-day EMA holds. A solid drop below that level could potentially indicate a short-term delay before Bitcoin challenges its ATH again. However, the longer-term outlook remains primarily bullish, with Bitcoin gradually aligning with previous cycles and potentially preparing for a strong upward move.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.