Bitcoin moves into key 'short box' zone

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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BTC:

• BTC's funding rate has fluctuated between slightly positive and slightly negative, as we can see below. This indicates a lack of conviction amongst traders, who are flip-flopping between Longing and Shorting.
• BTC's Open Interest increased substantially from the lows, up approximately 20%. This was leverage traders chasing the price higher as it moved into the $87k to $88k area. Although this wasn't matched by strong Spot buying, hence we've seen the move higher be relatively weak and short-lived.

BTC's funding rate:

Technical analysis

• BTC has seemingly fallen into the 'Short Box' we identified between $86,300 to $91,700.
• Price rejected into the main downtrend line (red line).
• Price has now pulled back to the local support of $85,000, although the major horizontal support is at $78k.
• To the upside, $87,200 is a key local horizontal level for price to reclaim and hold above. If price can do this, then $91,000 to $91,700 is a potential target, and we'd reassess at that point. However, we don't see this happening in the short term.
• The RSI downtrend line has seen a breakout with the RSI now sitting on top of its moving average and in middle territory. This could help the $85,000 area be a local support.

• Next Support: $85,000
• Next Resistance: $88,500
• Direction: Bearish
• Upside Target: $88,500
• Downside Target: $82,000

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Cryptonary's take

BTC has moved into our 'Short Box' that we had identified a number of weeks ago. We had to be patient in letting the price grind up to the box and to fill Short orders, which have now filled between $86,300 and $88,600.

We are of the view that the recent move up has just been a small relief rally and not much more than that. We expect BTC to move down to retest $82k as a minimum target over the next week or two. However, we see the possibility of a retest of $78k as somewhat likely as well.