Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Short-term selling pressure caused Bitcoin to drop below $29,000.
- The bullish order block from May 2 could see a positive response from the bulls.
At the time of writing, Bitcoin [BTC] facing intense selling pressure below the resistance of the $30,000 round number. While the bulls have yet to flip this area to support, they have also been slowly pushing BTC up since mid-April. The market structure of the daily time frame was bullish, but the lower time frames showed that a drop in price was likely.
Read Bitcoin [BTC] Price Forecast 2023-24
While the higher time frames may give bulls some hope, the sellers had a clear advantage on the lower time frames. The rejection on a bearish order block meant that the next bearish target was below $28k.
The break in structure gave the bears a strong short-term advantage
Source: BTC/USDT on TradingView
A bearish order block on the two hour chart was highlighted in red in the chart above. It was respected for the past two days as BTC bulls failed to take prices above the $29.6k level. The rejection caused BTC to drop to USD 28.6, breaking the market structure and turning it bearish.
The Awesome Oscillator has been forming green bars on its histogram for the past 12 hours to indicate declining bearish momentum. This matched BTC’s $28.6k bounce over this period. At the time of writing, Bitcoin changed hands at $28,871, up nearly 2% from the $28.3k local lows.
The OBV saw a sharp decline over the past two days to show strong selling pressure. Combined with the break in the market structure, Bitcoin was likely to move lower again. Beneath the $28.7k support was the $27.7k bullish order block. A retest of this region could give a bullish reaction on the price charts.
Is your wallet green? Check the Bitcoin Profit Calculator
Open Interest showed that bearish sentiment was increasing
Source: Coin analysis
The funding rate fell into negative territory on May 6 and ventured there again at the time of writing. Meanwhile, outstanding interest has fallen after BTC failed to break through the $29.8k region on May 6.
The break in the market structure with a lower time frame was a development that could send BTC down again. The negative funding rates showed that short positions predominated and the OI also pointed to near-term bearish sentiment.
