KuCoin Weekly Technical Overview: Will The BTC Consolidation End as a Breakout To The Upside or Downside?

2021/11/01 10:39:38

Bitcoin's price is currently hovering around the $60k mark. After recording a brand new ATH (all-time high) of $67k last week, BTC witnessed a minor correction as some serious profit booking took place at the $67k level. At the time of writing, BTC's market capitalization is at 1.14 trillion and market dominance of 44%.

The new ATH move by the BTC asset was very much expected but not at this speed. The degree of buyer strength and the intense bullish momentum we saw on the BTC price chart resulted from various events that took place in favor of Bitcoin last week.

Events That Contributed To BTC’s Epic Bull Run

The most notable event is the approval and successful launch of the first-ever Bitcoin ETF by ProShares, which can be traded on the US stock market. Also, the FDIC (Federal Deposit Insurance Corporation) chair - Jelena McWilliams, made positive remarks on digital assets, saying they are notable. She also said that FDIC is working towards establishing proper guidance on the intersection of the crypto world and the US banking system.

All these events enabled retail buyers to continue betting on the upside. This allowed BTC's price to skyrocket and register a brand new ATH at $67K. Ever since we saw an upside breakout of the Descending Triangle Pattern on the first week of October, BTC price grew by over 50% in less than 30 trading days which is commendable for an asset with over a trillion dollars in market cap.

But Bitcoin broke down ahead of the October close. The world's largest crypto faced strong resistance at its current ATH - $67k level. With a weekly low of $57650, BTC underwent price correction as it declined by over 14% due to profit booking at its ATH. For BTC to reach $100k before the year ends, it is important for the price to breach the $67k level and hold above it.

Interestingly, this rally in Bitcoin has been largely contributed by the spot market instead of the derivatives market. The BTC future inflows have seen a minor dip, and also the perpetual funding rates remain the same.

What Does Bitcoin Fear & Greed Index Say?

The Bitcoin Fear and Greed index is currently at 74, which is signaling the presence of greed. However, this is optimal and healthy compared to the extreme greed we saw a couple of weeks ago.

Bitcoin fear & greed index | Source - Alternative.me

Also, the BTC leverage is increasing with open interest swiftly recovering in the previous month. As we get to the end of October, Bitcoin is again under scrutiny on its potential to achieve $100k by the end of the year.

BTC Market Sentiment

There seems to be a conflict in the market sentiment on lower vs. higher time frames of BTC. As you can see below, most technical tools indicate a Sell on the 4-hour timeframe while the overall trend is still very much bullish. Therefore, if you are an investor, you can definitely consider buying and holding Bitcoin but if you are trading the BTC spot market, be careful with your buys.

Bitcoin monthly and 4-hour market sentiment | Source: TradingView | BTC

Bitcoin Technical Analysis

Bitcoin crypto went below the $59k mark only a week after registering an all-time high at $67k. BTC token sank to $58,800 after losing close to 4% of its price the previous day. However, BTC quickly recovered and crossed the $60k market, yet again compensating last week's selling pressure.

Bitcoin Price Chart on the 4-hour Timeframe on KuCoin | Source: BTC/USDT

In the above price chart, Bitcoin's price started to consolidate and started to form a range. The entire past week's price action of Bitcoin was about the fight between buyers and sellers. Buyers came in strong at the beginning of October's last week and succeeded in reaching the $63.5k mark. However, sellers came back strong taking the price down to $58k.

Buyers took support from the significant $58k S&R area and tried to make a higher high but failed to do so. There is certainly strong indecision in the market, and at this point, sellers could take over as they slowly start to gain momentum.

Bitcoin Price Chart on the 4-hour Timeframe on KuCoin | Source: BTC/USDT

The higher timeframe's resistance is currently at $67k and $68k. For BTC's price to break these levels, the buying momentum should be strong enough, and it seems a bit off for now. The possibility of the price going down to $58k support level is more, and if the selling pressure continues there, it can fall all the way to $53,400.

Stay tuned and watch the KuCoin Blog for more interesting educational crypto content. All the best!

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