Bitcoin shows short-term promise: Does this herald 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 fell to a higher timeframe demand zone and witnessed a minor bounce in recent hours.
- Bulls lacked strength in the market in the near term.
Bitcoin [BTC] saw a rough fall on the price charts last week to reach $25.2k. A recent report explored the implications of BTC flows into and out of exchanges and noted that a widespread sell-off might not follow.
Read Bitcoin’s [BTC] Price Prediction 2023-24
At the time of writing, Bitcoin was trading just above a higher timeframe area of interest. While selling pressure saw a notable decline recently, it did not signal a rally was imminent.
The price action of Bitcoin in the past few days showed a bounce in prices was possible
Source: BTC/USDT on TradingView
The trend of Bitcoin was firmly bearish on the 4-hour chart. But in the past 24 hours, this outlook began to change. The most recent lower high was at $26.6k, marked in orange. BTC bulls managed to close a 4-hour trading session above this level and achieved a bullish market structure break in this timeframe.
A look at the daily chart showed things were still dire for the buyers. However, the $25.6k zone was highlighted in cyan to indicate the presence of a bullish order block where the mid-June rally began.
Therefore, a retest of this zone was ideal for lower-timeframe traders looking to go long. The recent break in structure suggested a move upward was likely. The RSI climbed back above neutral 50, but the OBV saw only a small bounce in the past 24 hours.
The Fibonacci retracement levels (yellow) were plotted based on the free-fall that BTC saw last week. It showed that the $28.3k and $29.1k levels could be tested as resistance. The $28.5k level was significant as well.
The negative funding rates showed market bias leaned bearish
When Bitcoin bounced from $25.6k to reach $26.4k, the Open Interest did not show a noticeable uptrend.
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Instead, when BTC reached the lower high at $26.6k and dipped to $26.2k, the OI saw a sharp fall, which suggested longs from lower were taking profit at the short-term area of interest.
This signaled a lack of bullish conviction from market participants in the past 24 hours that a move toward $28k could materialize. The spot CVD also jumped higher alongside prices, which showed some demand was present.