Bitcoin shifts gear on technical breakout 

We expect a move to $39,300, where some of the Short Open Interest will be wiped out.

TLDR

• Bitcoin closed a 12-hour candle above $38k resistance for the first time.
• The breakout comes after a Fed official signalled earlier rate cuts are possible.
• Technical indicators like RSI show room for more upside without being overbought.
• The next key level to watch is $39.3k, where some Short Open Interest sits.

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

• We thought the FED speak wouldn’t give us much, but FED Governor Waller indicated yesterday that the FED may be able to begin cutting rates early next year.
• All Indexes are due to open higher today - the S&P, Nasdaq and the Dollar Index.

Let’s now dive into the technicals for BTC. 

BTC 12hr

Technical analysis

• After putting in a series of higher lows, Bitcoin finally seems to have begun to break out, having been able to close a 12-hour candle above $38,000. 
• What’s also positive about the current move is that the RSI indicators are still relatively low, so we’re not close to being overbought, and therefore, Bitcoin has room to move higher. 
• There is dwindling volume, so this will need to pick up if we’re to see a further follow-through in price. 
• To the downside, if there is a breakdown, the local uptrend will need to hold to maintain the bullish structure. If not, the horizontal support at $35,600 will need to hold. 

Market mechanics

• The Open Interest rose yesterday to a new yearly high of $17.16b. 
• The OI-Weighted Funding Rate has remained relatively flat around the 0.01% level, indicating a clear balance between Longs and Shorts.
• We have noticed that the Long/Short Ratio is at 1.0517, so more participants chose to go Long yesterday, likely into the breakout of $38k. Retail is more Long here. Overall, 1.05 isn’t so extreme that it should concern us for a squeeze of the Longs.  

Cryptonary’s take

Bitcoin has shown fantastic strength, having been able to break out of $38k and to have now closed a 12hr candle above that level. We now need to see Spot buyers coming in, as that’ll be what really sustainably drives prices higher. 

We expect further upside here and certainly wouldn’t Short this, despite the fact this move has yet to prove itself. 

For now, we’ll remain patient and continue to look for DCA opportunities. Right now, we still eye the $34k level for DCA opportunities. However, if price breaks higher to $40k, we will reassess from there and likely push our DCA levels to $35,600.