Boring BTC, is a breakout imminent?

The charts have shown a relatively stable pattern, giving off an air of predictability. It's almost as if BTC has become "boring" for some observers. However, beneath this quiet calm lies the potential for a major breakout, and the question on everyone's mind is, "Is a breakout imminent?" 

Let’s unpack the tension in the market.

TLDR

• Bitcoin remains within a bull pennant, with a bias for an upside breakout.
• RSI is in overbought territory but showing signs of resetting.
• Positive funding rates and high Open Interest suggest a Long bias.
• The technical structure supports another upward move, potentially targeting $37,700.

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.

Technical analysis

For several days now, there have not been too many changes in terms of technical setups. We remain in the bull pennant (with a bias to break to the upside) while battling at the horizontal resistance of $34,500. 

Recently, BTC has traded without much correlation to risk assets (the S&P). However, we saw in the past few days that BTC has been somewhat more guided and correlated to the S&P. It is important to continue watching and assessing this to see if the correlation increases. If it does, BTC may return to trading as a risk asset rather than a safe haven asset. This is key going forward. 

RSI and funding rates

The RSI is still in overbought territory. But while BTC continues in this tight range, we’re seeing the RSI reset somewhat. This reset is despite the fact it’s still high and in overbought territory. 

The funding rates remain positive while open interest is still high. So, there is somewhat of a decent amount of leverage being taken out here, and the bias is to be Long. For now, this is not something that should concern us. However, if both increase further, this should make us more cautious about further upside moves.

BTC 12-hour 

Cryptonary’s take

The technical structure for BTC is still bullish here, and price continues in the formation. The structure suggests another break higher for BTC to get into the $37,700 area. If this area is reached, we may begin to see some profit-taking with investors then likely to re-add BTC in the low $30k’s again - somewhere between $31,000 to $33,000.

Action 

1. We think BTC still has another leg higher here before a more meaningful retest lower in the coming weeks/months (before year-end). However, we must be wary of a possible Spot BTC ETF being approved. Yes, this is somewhat priced in, but we suggest being positioned in BTC before this news. However, you should also be ready for short-term profit taking, post-ETF approval - whenever that comes.
2. If you’re underexposed to BTC, we suggest increasing exposure on meaningful pullbacks and not taking profit at higher levels. Place the focus on increasing exposure.