BTC entered last week continuing its weakness which started late on Sunday before Tradfi futures market open.
It swept liquidity below previous week low, reached below $26,000 on Mon and started consolidating above that level.
Later just before the start of the US session, news hit the wires that MicroStrategy had acquired almost 5.5k BTC, which gave BTC a bounce.
On Tue, BTC initially looked heavy, drifting down slowly, but later in the day it was supported and bid up as Congress urged SEC’s Gensler to grant approval for spot BTC ETF ‘immediately’.
On Wed, it pumped above $26,800 in European session driven by perps buying and short-squeeze, but that move was erased in big part in US session helped by the announced sale of Binance Russian unit to CommEX, and leveraged longs looking for exit.
Later, Gensler took heat from lawmakers over his approach to regulating crypto, which improved crypto sentiment and made BTC bid up again.
On Thu, the move accelerated, driven by enthusiasm around ETH futures ETFs with VanEck preparing to launch first and others lining up.
SEC then announced the delay of its decision on multiple spot BTC ETF, but the market was resilient.
On the other hand, a lower m/m number of core PCE released on Friday didn’t cause much market reaction to the upside and the market traded sideways until early on Sun.
Then the deal was made to avert US government shutdown.
On the back of it and in anticipation of spot ETH ETF launch in the coming week with 9 funds ready to start trading from Mon, BTC jumped aggressively just after Tradfi futures opened, to hit $28,500.
Then it retraced part of the move to close the week slightly below $28,000.
After a strong last week with higher daily lows everyday, BTC is now at a critical juncture.
$28,000 and $28,550 are key levels to watch for market reaction around them, as it should set the tone for the next few days or even weeks.
$28,000 has been limiting the upside so far (with only swift intraday sweep above) since Aug 17's big dump.
$28,550 is the level where that dump started and which had been working as a support before.
To be confident about longs, we would need a daily close above $28,000 and ideally above $28,550.
That would open the way to target 2023 high.
Yesterday, we closed slightly below $28,000 and today so far we’ve just traded above and tested $28,550 so it will be relevant where we finish the day.
It’s important to be vigilant at those range extremes as we’ve seen so many false-breakouts followed by countermoves in recent weeks.
They also often happened on Mondays.
Market sentiment now is bullish, driven by excitement around first ETH futures ETFs coming, lower PCE on Friday and US government shutdown averted over the weekend.
We will need to see if it’s supported by price action to give us potential for a longer and bigger move or it’s a trap (buy the rumor, sell the fact situation).
Good to be prepared for both scenarios.
It’s not a good idea to chase the market and try to join an aggressive move close to the top (like in current instance) or bottom of the range.
Instead, it’s better to be cautious, watch how the market moves to the upside vs the downside, how it trades around key levels and use rejection or acceptance for entries.
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