Fundamentals and market mechanics are thrown out of the window when there is majorly positive news like yesterday’s. We saw TradeFi begin buying up BTC in anticipation of ETF approvals, which led to a ripping short-squeeze.

TLDR

• BTC exploded above $32k and $34.5k resistances after ETF approvals.
• BTC is now battling at $35k resistance but overbought on daily RSI.
• A pullback to $29k-$31k possible despite the bullish long-term outlook.
• Watch out for buying opportunities on dips before 2024 Bitcoin halving.

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

BTC began moving higher in yesterday’s session and squeezing into the horizontal resistance at $31,300. Of course, from there, the next resistance was at $32,000 before a relatively clear path to $34,500 would be possible. 

In anticipation of Bitcoin ETFs being approved, we saw a large amount of buying come in yesterday. This aided BTC to go higher and break above its $32,000 horizontal resistance, fuelling a short-squeeze, which took the price to the $35,000 area. 

Bitcoin now finds itself battling at a main horizontal resistance at $34,500. This is the next level to close above, which could then help BTC move higher. 

It’s important to note here that when prices go straight up, they usually come straight back down. Prices need to stabilise at certain levels and build those levels as future supports that could then help prices go higher from them. Straight-up moves usually aren’t sustainable, despite the fact it’s off of really positive news this time. 

RSI and funding rates

When we look at the RSI, it's at 88. This is the most overbought Bitcoin has been since January 2023. The last time that it was this overbought was in December 2021. BTC is phenomenally overbought while pushing into a main horizontal resistance at $34,500.

The funding rates are very positive again. However, open interest isn’t ridiculously high, particularly after yesterday’s large price increase saw many of the shorts’ open interest wiped out - liquidated. However, this is the most-positive the funding rates have been in months. 

Conclusion on trading BTC

Bitcoin is very overbought here, but it has achieved these significantly higher prices due to the ETF news. It’s possible the buying pressure can be sustained, but with BTC this overbought, it becomes increasingly less attractive to buy at today’s prices. If we have a slight retest of a lower level, that’s where large buyers may step back in. This level may be in the $29,000 to $31,000 area. 

In the long run, today’s current BTC price is still low compared to what it may be in the upcoming bull run, which we believe peaks at some point in 2025 and a price point of $100,000 to $150,000.  

We’re still very cautious about the macro in the coming months. Still, with time running out between now and the next Bitcoin halving (April 2024), increasing our exposure and using major price pullbacks as buying opportunities in the coming months is important. 

Action 

1. If you’re a long-term investor, BTC is still a good buy at these prices and can achieve a 3-5x multiple between now and the bull-run peak. 
2. However, with BTC currently so overbought, it's very possible a pullback in price is needed. This area may be the $29,000 to $31,000 area.