$36,800 could act as short-term support for price.

Ultimately, we see a test of $34k and sub $34k as likely in the coming weeks/months, even if $40k/$41k is tested first.

Deeper insights ⬇️

TLDR

• Bitcoin rejected again from the key $38K resistance level, now looking weaker.
• Support at $36.8K may hold temporarily, but lower prices look likely.
• A test of $34K or even below in the coming weeks/months is probable.
• The number of Shorts building relative to Longs indicates fading upside momentum.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Macro analysis

• This week's key data is GDP on Wednesday, Core PCE, Personal Income and Personal Shopping on Thursday, and the FED Chair Powell speaking on Friday. 
• US markets are back open today, with the S&P and Nasdaq nearly unchanged pre-market. The DXY (Dollar Index) has opened lower but is now putting in a bearish divergence close to oversold territory. We will likely see a relief bounce for the DXY at some point in the short term.  

Let’s now dive into the technicals for BTC. 

BTC 12hr

Technical analysis

• Bitcoin has once again rejected from the main resistance zone of $38,000. 
• The next support will be the uptrend line. If that’s broken, we may see the main support of $35,600 tested. 
• The RSI has reset on most timeframes. However, the 3D and the Weekly remain overbought, with the 3D also having a bearish divergence. 
• Despite many supports, we see price potentially retesting lower levels, say $34,000, in the coming weeks, even if that means there is enough momentum to go higher in the short term. 
• Even in bullish markets, BTC sees 10-20% pullbacks. This would bring the $34,000 price into a target. 

It was key for Bitcoin to break out of $38,000 and comfortably close above that level if it wanted to see higher prices. Ultimately, this hasn’t happened, and we will likely see momentum fade.  

Market mechanics

• The Open Interest in Bitcoin remains at last week’s high of $16.85b. 
• The OI-Weighted Funding Rate has been range-bound between 0.006% and 0.010%, but it has been decreasing. This indicates that Shorts are beginning to become heavier in comparison to Longs. 
• The Long/Short Ratio is at 0.9324, indicating more participants have chosen to Short in the last 24 hours than Long.  

The Mechanics suggest that there was an even balance between Longs and Shorts, but now that battle is weighing more greatly towards Shorts. This is fine at the moment, but if it becomes too heavy on the Short side, Shorts may become vulnerable to a squeeze. Just something to watch out for. 

Cryptonary’s take

Bitcoin’s rejection into $38,000 may squash some of the momentum we’ve seen in the market recently. In the last 6 weeks, Bitcoin has gone from $26k to $38k, and having rejected from this $38k level despite testing it several times, this may lead to a deeper pullback. 

The mechanics show Shorts are building but not currently at a level that should concern us that they may be vulnerable to a Short squeeze. 

Due to recent price action, we see Bitcoin making a more substantial pullback in the coming weeks. We are not currently looking for any trade setups, and we will wait for a cleaner break in the range between $35,600 and $38,000. We will also look to DCA Bitcoin sub $34,000.