Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The upward movement was accompanied by a large increase in OI.
- Longer-term sentiment remained bearish.
During Saturday’s US debt ceiling negotiations, Democrats and Republicans reached an agreement in principle. This was good news for the market as it averted the catastrophe of a US debt default.
Read Bitcoin [BTC] Price Forecast 2023-24
This appeared to cheer up market parties. Likewise that of Bitcoin [BTC] prices pumped from $26.6k to $27.2k. We say pump, but it was only up 2.7% on a weekend. Will the bulls be able to reverse the losses from earlier this month?
Bitcoin is witnessing a short-term range formation under resistance
Source: BTC/USDT on TradingView
For over two weeks, Bitcoin has been trading below the $27.8k resistance. This was an important resistance level due to its importance in early April. The price also retested this level several times in late April and early May as support.
Eventually the buyers succumbed, and it was turned into resistance. At the time of writing, the two levels to watch out for in the lower time frames were the $27.8k resistance and the $26k level. A range (orange) was seen stretching from $26.1k to $27.6k.
The RSI was in overbought territory on the 2-hour chart after BTC climbed above the midrange at $26.8k. While this was a significant step in range, the bigger picture showed that bears still had the upper hand.
A look at the daily and 4-hour charts revealed a bearish market structure. This would turn to a bullish advantage on a move above $27.8k, but traders should watch out for liquidity chasing in the $28k area. It may take a few trading days for Bitcoin to be accepted above $28,000. Until then, buyers can remain cautious about market intentions.
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A strong performance from bullish speculators made the sentiment clear
Source: Coin analysis
Bitcoin’s 2.7% gain generated nearly $400 million in Open Interest. The rise in OI alongside rising prices showed that speculators were mostly bullish. The funding rate fell in recent hours, but remained positive.
Overall, a move into the $27.6,000 – $28,000 region was possible. Still, it remained likely that Bitcoin would face rejection and a reversal in the price charts from then on.
