BTC continues the battle at the key resistance of $38k, having retested the local highs of $38,400 yesterday and again rejecting.

The mechanics are in a healthy spot here, we now just need more Spot volume to come in for $BTC to kick higher.

TLDR

• BTC continues battling at key $38k resistance, unable to break higher.
• Technicals remain in a local uptrend, supportive of more upside.
• Spot buying volume needs to increase to fuel further breakout.
• The chances of a breakout are now 50/50.

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

• Key economic data was released today -  with the numbers supporting a risk-on environment.
• The S&P and Nasdaq are higher in pre-market trading. 
• The Dollar Index (DXY) continues to look technically primed for a bounce/relief rally. This may suppress more meaningful upside for risk assets - something we need to be aware of. 

Macro Data

Core PCE Price Index YoY: Prior 3.7% | Consensus 3.5% | Actual 3.5%

Core PCE Price Index MoM: Prior 0.3% | Consensus 0.2% | Actual 0.2%

PCE Price Index YoY: Prior 3.4% | Consensus 3.0% | Actual 3.0%

PCE Price Index MoM: Prior 0.4% | Consensus 0.1% | Actual 0.0%

Personal Income MoM: Prior 0.4% | Consensus 0.2% | Actual 0.2%

Personal Spending MoM: Prior 0.7% | Consensus 0.2% | Actual 0.2%

Overall, this data is positive. It indicates that the rate of inflation is coming down, which may mean the FED can begin cutting rates in late Q1/early Q2 2024 - which would be supportive of risk assets. 

Let’s now dive into the technicals for BTC. 

Technical analysis

• BTC continues to hold up well at $37,700. However, it does look heavy when squeezing into $38,000 without being able to maintain comfortably above that level. 
• BTC has remained in its local uptrend, which, while intact, should be supportive of continued bullish momentum.
• $38,400 remains the key level to break to the upside. If done, $39,300 would be the next local target. 
• On the downside, the local uptrend line would need to hold, but if lost, the horizontal support of $35,600 would be the key support. 
• The RSI has reset on all timeframes except the 3D and the Weekly. The 3D had put in a bearish divergence from overbought territory - something we should be mindful of.   

Market mechanics

• The Open Interest has risen slightly again today from yesterday to new yearly highs of $17.22b. 
• The OI-Weighted Funding Rate has remained flat at the 0.008% level.  
• The Long/Short Ratio has reset to more normal levels at 0.9936. 

Cryptonary’s take

Bitcoin continues its battle at the $38,000 key resistance and is showing strength at the lower levels. However, Bitcoin is looking heavy on moves up to $38,000. We see a breakout as being very 50/50. 

For the breakout to come, we would need to see more sustained Spot buying volume, which is currently in a daily decreasing trend - so we’re not really getting it at the moment. However, the technical setup is still supportive of further bullish momentum, whilst the mechanics is providing a relatively healthy backdrop. 

We’re steering clear of trades because Bitcoin’s short-term price direction is currently tricky to call. But we will continue to look for DCA opportunities. Our DCA levels for Bitcoin remain at $34,000, and if we see sub $33,000, that’s where we’d be more aggressive in our DCA buys.