BTC Rally Stalls for Now
Bitcoin prices remain softer this week with the futures market down from the fresh record highs printed last week. BTC surged to highs of just above the $100k mark before selling kicked in to take price down to current levels around mid 96s. With many linking the current decline to profit taking automated selling as BTC tests $100k for the first time, the outlook remains bullish for now and price continues to hold just below the level.
Near-Term Risks
The near-term risk is that failure at the $100k mark forms a double top formation, suggesting room for a correction lower. Indeed, recent price action can also be viewed as a sloping head and shoulders pattern, another bearish technical pattern. As such, while price remains below $100k, risks of a correction lower are growing. This view is further endorsed by strong bearish divergence in momentum studies readings.
Institutional Demand
Bitcoin institutional demand has calmed for now. Following a record $3.2 billion in crypto ETF inflows over the prior week, last week saw just $.4 billion, with price action so far this week suggesting that figure will be weaker still, potentially even turning to net outflows this week.
Bullish Medium-Term View
Still, while there is room for consolidation and correction near-term, the broader outlook remains bullish for BTC. Traders ware widely expectant of a fresh run higher early next year as Trump takes office and easier conditions for the crypto sector start to take shape.
Technical Views
BTC
The failure at $100k is an important technical signal here with the potential for both a double top and head and sloping head and shoulders pattern suggesting bearish risks. In terms of support level to watch, 93,580 and 91,025 are the key areas to monitor with 86,645 the deeper level to note if we start to really unwind. Topside, bulls need a break above current higher to revive momentum.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.