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The mechanics for BTC have reset slightly regarding the Open Interest, which is good.
Less leverage swashing around is always more positive.
We are beginning to see the Funding Rate ramp up slightly today, although it is not at high levels - currently at 0.015%. There are more Longs than Shorts, but there is no current imbalance. So, it's all good from a mechanics perspective.
Technical analysis
- The bearish pennant didn't see a continuation of the pattern; in fact, price broke to the upside, helped by Powell's dovish pivot, sending risk assets higher.
- The main horizontal resistance above price is $44,000.
- Beneath price, the horizontal support sits at $40,900, which also converges with the uptrend line's support. If these converging supports are lost, this may open the door for further downside for BTC to potentially $38k.
- The RSI has reset on the 12hr and the Daily timeframes. It remains overbought on the 3D and the Weekly, although it is coming down. In the coming months, we will likely see more consolidation for these metrics to reset more.
Cryptonary's take
Hard to call here for BTC, and even though we're constructive and positive on the market as a whole, we do see BTC pulling back and consolidating for some time. It's possible that in the short term, we will see a move up to $44k. If $44k is broken, the local high will be higher and can pop to $46k.But ultimately, we think BTC's local high of $44k is within 5% of its local high before we see further price pullbacks and periods of consolidation in Q1 of next year.
Remember, there are 4-5 months until the next halving; it won't be up only from here, particularly with the meme season we're currently in.
We likely see another week or so of meme season. We would be more cautious here rather than looking to add to positions aggressively.
We believe the time will come to add considerably to current positions, but we see that being in Q1 of 2024.
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