For further upside, we'd need price to hammer out a new support on top of the older resistance. Ideally, price can form support between $38,300 to $38,600. If so, we can see north of $39k.
TLDR
- BTC finally broke decisively above the key $38k resistance level.
- Further upside is likely if BTC can form support between $38.3k and $38.6k.
- The local uptrend remains intact, providing support around $35.6k.
- Retail piling into fresh longs but move not driven by large spot buyers.
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
- The market will await FED Chair Powell’s speech later today. It’s expected that Powell won’t say anything unexpected, so it shouldn’t be a major market-moving event.
- The S&P and Nasdaq are up in the pre-market trading, having held close to their highs in yesterday’s trading session.
Technical analysis
- BTC has finally managed to break above its $38,000 horizontal resistance with a convincing 12hr candle closure at $38,650.
- The local uptrend has acted as support for over a month, and while this formation remains intact, Bitcoin is likely to continue with its bullish momentum.
- In the short term, for BTC to see a sustained move higher, we would need price to consolidate above the prior resistance (say between $38,300 and $38,600) and turn this area into new support.
- If there is a breakdown, we would expect the local uptrend to provide some support, and if that area cannot hold, then the horizontal support of $35,600 should provide support for price.
Market mechanics
- The Liquidation Heatmap is interesting. A large amount of Shorts have been liquidated at $38,600, and there is now a new sizable amount of liquidations at $39,100.
- The Open Interest has come down slightly, but not enough that you’d consider it a flushing out of excess leverage.
- As price has held at the $38,000 level overnight, the OI-Weighted Funding Rate has ramped up to the 0.015% level.
- The Long/Short Ratio has also moved meaningfully positive, now at 1.0555. This indicates more participants have gone Long rather than Short.
Cryptonary’s take
Bitcoin has finally broken out above $38,000, but not on large volume.What’s important here for price is to build a new base above the prior resistance and flip that area into new support. If Bitcoin can do this, we can see $39,300 and potentially $41,000. We see this local move topping out in the early $40k’s.
The mechanics have provided an interesting setup in that we’re seeing retail pile into fresh longs over the last 24 hours, with the move mostly taking out Shorts rather than being driven by large spot buyers.
We see further upside as likely. However, we’re not sure there’s another 30% move in this. There may be another 10% upside left, but if we get that, we may begin a slightly deeper pullback - a healthy pullback.
We will raise our DCA entries to $35,600; these will be light DCA Spot buys for Bitcoin. If we’re given sub $34k, this is where we’ll be more aggressive in our Spot DCA buys for Bitcoin with a 12-18 month time horizon.
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