Will we finally get a breakout from the current ‘boring’ range?
BTC entered last week trading sideways in a tight few-hundred dollar range set on the weekend and roughly in the middle of the bigger key $29,500 - $31,500 range.
It was a thin market on Monday as US traders were off on a long weekend with shorter US session on traditional markets before Independence Day.
It was used as an opportunity to push BTC towards $31,500 upper band on lower liquidity helped by weaker ISM Manufacturing data.
However, as BTC got close to that level, it started retracing. It was drifting slowly lower not only on Tuesday but also on Wednesday.
Even though the US was back at work on Wed, the US session was quiet without any bigger moves.
BTC didn’t even react much initially to late Wednesday comments from BlackRock CEO saying that the role of crypto is digitizing gold and BTC is an international asset.
Early on Thursday, BTC started to bid up quite aggressively. It attacked ’23 high but just after swiping liquidity above, it was sold off.
Very hot ADP and higher quits in JOLTs report implying tighter labor market made market participants revise up their expectations for further Fed rate hikes – that only added fuel to the fire and sent BTC lower.
Later that day, the news about Binance senior executives quitting also contributed to the weakness. But as BTC was getting closer to the lower range band of $29,500 with more buyers piling up and sellers losing steam, it finally bounced up.
Eventually, Thursday was the biggest day of the week with both weak shorts and longs squeezed.
On Friday, NFP was released and it was surprisingly weak.
Market participants were positioned for a stronger number on the back of strong job data pieces released a day before but it caused only a small reaction to the upside.
For the rest of the week, BTC traded sideways and finished almost where it started.
Practically nothing has changed on BTC over the week, so our approach remains the same as it was a week ago.
We are still in the $29,500 - $31,500 range and those two levels are key to finally give us a sustainable breakout and directional move.
So far for more than two weeks now, BTC has been respecting $29,500 and $31,500 and with the market being thin, it’s been chasing liquidity and triggering stops set in different lower timeframes.
Trading the range and using liquidity pools for taking profits and/or for reversing positions has been working well and it should be so until we break out.
For long-term traders, it’s been a boring market recently.
For bulls, it’s good that we are still trading close to ’23 high but it’s worrying that even though the sentiment on BTC is positive on the back of ETF filings and EDX launch, buyers haven’t been able to push decisively through $31,500 as all attempts were absorbed by sellers.
On the other hand, there has been a lot of absorption by buyers around $29,500 so effectively, the market is still in indecision-mode.
Worth watching how the balance between bulls and bears is changing for early signs of either side gaining upper hand, which will lead to directional move.
In case of a breakout, hopefully this week, levels to watch below $29,500 and below $31,500 remain the same as indicated last week.
Have a great trading week ahead!
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