Bitcoin’s price has failed to continue its upward momentum, since dropping below the $100K resistance level. This has led to a lot of uncertainty surrounding the future price action.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, the price has been consolidating below $100K, after briefly breaking it to the upside a couple of weeks ago and recording a new all-time high. A few days ago, the market failed to break the $100K level and was rejected to the downside.
As a result, the $90K support level is likely the target in the short term. The reaction to this area will determine the short-term price action for BTC.
The 4-Hour Chart
The 4-hour timeframe demonstrates a clearer picture of the sideways price action. The market was initially making higher highs and lows inside an ascending channel.
Yet, it has since broken the pattern to the downside and retested it twice. With the RSI also showing values below 50%, indicating bearish momentum, the market is likely to drop toward the $90K level before a potential bullish continuation.
Sentiment Analysis
By Edris Derakhshi (TradingRage)
Open Interest
The Bitcoin futures market sentiment has been offering valuable insight over the last few years, helping analysts predict potential volatility in the short term. This chart presents the open interest metric, which measures the total number of open perpetual futures contracts on derivatives exchanges.
As the chart demonstrates, the open interest values have been at all-time highs, even though the market has dropped below the $100K level and stopped trending. This can indicate potential volatility in the short-term, caused by liquidation cascades. As a result, investors should be careful when investing in Bitcoin at the moment.
