BTC started last week continuing the slow retrace of Friday’s up-move to a new ’23 high.
After initial weakness, it traded sideways on Monday.
On Tuesday, BTC bid up slightly and later tried to move further up on the news of Fidelity preparing to file for spot BTC ETF.
However, the resulting strength was quickly sold off - in line with our expectations about good news having diminishing positive effects on price.
With no sign of bulls or bears having the upper hand, BTC traded in a tight range on Wednesday and Thursday, not reacting much to crypto or macro news.
Early on Friday, with aggressive buying on BCH as a sympathy play, there was also another attempt to push BTC higher to attack ’23’s high, but BTC only managed to set a new weekly high and got rejected.
Later that day, a weaker-than-expected PCE gave BTC only a small lift up.
Soon after the data however, news hit the wires that SEC had found BTC ETF filings inadequate and returned the documents.
That triggered a market dump to $29,500 support area.
Market participants digested the news and found it not as bad as initially thought, as the SEC had asked for the name of the spot BTC exchange and some more details. The market then started picking up.
Fidelity and a few other applicants updated their filings later that day, which helped to support BTC price.
It traded sideways till the end of the week, finishing it roughly unchanged.
Not much changed on BTC last week.
It was trading sideways in quite a tight range of $29,500 - $31,500 throughout the whole week.
As mentioned a week ago, it’s important for bulls to hold $29,500, and that level was tested on Friday from the SEC/ETF news and where we found buyers stepping in.
The ‘23 high of $31,500 was working as resistance with BTC trying but not able to get there last week.
Eventually, we had a market where any intraday strength or weakness towards higher and lower bands was reversed – a sign of indecision.
For intraday traders, it’s advisable to apply range-bound strategies to capitalize on that sideways moving market until we break out.
It’s easy to be chopped out in this kind of environment, so it’s important not to FOMO in the range, but rather to fade overextensions.
Bear in mind that eventually we will have a break and the longer we stay in the range, the bigger it usually is.
From a longer time perspective, the current structure favors the long side as we’ve had consolidation after up-moves, which more often than not leads to another leg up.
On the other hand, bearing in mind the narrative and the nature of that up-move in the week before, aggressive buyers (including institutional ones) have seemed not to be visible on BTC in recent days or at least they’ve been much weaker than before.
That’s not a good sign for bulls.
To be confident about the long side of the market, it is key to break $31,500 and have a daily close above that level.
Next challenge then would be $32,500, which if broken should open the way for a much bigger move to $38,000 or even $40,000.
On the other hand, if $29,500 gives way, we can have a deeper correction as we get into the area where the market moved aggressively up on low volume before and that’s what we could have on the way down too.
There are some minor challenges at $29,000 and $28,500 before an important support area at $27,500 - $27,000.
As always, being cautious, open minded and well-prepared for different scenarios is key.
Have a great trading week ahead!
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