• Bitcoin Price Analysis: What’s Next for BTC After a New High and a Quick Retracement?

  • Bitcoin’s price reached a new all-time high before retracing almost immediately. We take a look at what’s going on and what’s coming up.

    After a three-week rally, Bitcoin’s price has finally entered a correction to flush out the leverage, cool off the overbought conditions, and help build a structure. This occurred after open interest, funding rates, and the leverage ratio all reached high levels.

    The near-term support level of $60K appears to be holding, which is a good sign. Given the current selling pressure, the weekly close is unlikely to be above $64.8K.

    BTC Price Technical Indicators for the Short Term

    The cryptocurrency must maintain a closing value of $60,000. The ideal scenario would be for $60K to be held, a cup and handle to form, a retest of $64.8K, and a break out higher towards $70K to $80K.

    A close below $60K would be a near-term bearish signal, increasing the downside risk to $59.7K, $58.3K, $57.1K, $56.5K, and $53K. The 21-day EMA is also expected to provide support. The mid-$50,000 levels also have strong technical and on-chain support, which is reassuring in the event of another round of liquidations. The deepest level we’d like to see for a pullback is $53K – the previous high from September. Breaking below this level would increase downside risk, which is not ideal for the bulls.

    The overall structure continues to point to BTC being in Wyckoff Accumulation Phase E, where it usually accelerates to the upside but with shakeouts along the way. In the short term, there may be a bullish divergence forming on the hourly chart, but bitcoin must hold $60K and $59.6K for validation before making higher highs.

    Bitcoin Price Analysis on the Blockchain

    Based on on-chain metrics, the overall trend remains firmly bullish. For the fifth month in a row, the Mean Coin Age has been rising.

    It recently fell for two days before quickly resuming its uptrend, implying that long-term holders (LTHs) were distributing lightly and that there is no trend of serious distribution as BTC reached a new all-time high.

    This means that long-term investors and miners will continue to hold, distributing lightly on a regular basis. Since peaking at $15.2 billion, open interest has fallen by $1.2 billion, and funding rates are currently at 0.03. The leverage ratio remains at 0.18, the same as it was in April and September of this year. This means that additional liquidations are possible, and it is critical to remain cautious.

    The ASOPR remains slightly above one, indicating that LTHs are not aggressively taking profits during this pullback. All exchange reserves have also fallen to multi-year lows, owing to significant outflows on derivative exchanges.

    Bitcoin becomes more scarce on exchanges, making it more difficult for institutions to accumulate because there will be fewer BTC for sale.

    To summarize

    Bitcoin has risen significantly in the last three weeks, and derivatives leverage has increased significantly – this is why a short-term pullback could be beneficial to the market.

    To keep the structure and form a higher low, we need to see support hold between $60K and $53K. The overall trend in fundamentals and on-chain remains bullish, and there are no signs of aggressive distribution forming, indicating that this bull market has more upside left in it.

    The dollar has continued to fall after topping at a key technical level, which is likely to be a headwind for Bitcoin, particularly in the coming months.

    So long as the trend in on-chains remains intact, the current correction appears to be a near-term shakeout, with bullish continuation likely once the leverage is flushed out, leading to a retest of $64.8K and a breakout towards $70K to $80K.

    Volatility is to be expected in the coming months, but bulls remain in command.

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