Dear Subscribers,
The last two weeks have been a rollercoaster as bitcoin remains prone to volatility. Macro data release, news about ETF and explosive altcoins, we have a busy end to the year ahead.
In this Uncharted:
We explore how bitcoin broke through resistance at $37.3k and climbed to an 18-month high of $38k before edging back.
We analyze the release of the Consumer Price Index, which was flat in October from the previous month but increased 3.2% from a year ago; both were below estimations.
We outline which coins you should have under the radar, as several altcoins record double-digit gains.
Let’s dive in!
State of the System
Let’s pick up where we left off last timethe Uncharted 51’s outlook on November 3rd:
“This week's bitcoin price came within a hair of the $36k mark before abruptly reversing course and correcting to $34.25k. After a near 30% run over the past month, it is natural for the price to cool off as some traders take profit and market participants evaluate whether or not the catalysts for the rally remain valid.”
Bitcoin has entered a consolidation phase after two weeks of volatility, hitting $38k for the first time since May 2022, before the brutal bear market. Bitcoin remains buoyant on several factors, including ongoing optimism that regulators will soon approve the first spot bitcoin exchange-traded fund (ETF), which would be expected to usher in a fresh wave of investor interest.
As we hovered around $36.2k, we are still in the bullish quadrant as bitcoin keeps trying to break the resistance level of $38.2k to keep up with the rally.
We can observe a substantial gathering of liquidity within the $25k to $31k range, establishing a robust support zone focused on the $30k -$31.5k mark. With the current price standing higher than these liquidity pools, we anticipate that some investors might opt to further accumulate at their cost basis, showing confidence even in the face of a potential retest of these levels.
Above this accumulation zone, an interesting gap between $31k and $33k suggests a lower volume of transactions in this range. This presents a potential weak spot in the market. If the price were to dip below the $33k mark, we could see $30k as our following line of defense. Yet, new support is forging around $34 - $34.5k.
Bitcoin has witnessed a new surge of growth and shows no signs of slowing down. A move higher would re-establish the highs from May 2022, and the bulls would need a reason to break it apart. As the Risk Signal indicates that the market will remain in the low-risk zone without spikes, the possibilities of further gains outweigh the chances of reversing to the downside. If we consider Tuesday's drop as a correction, it opens the door to $40k. It’s buy the dips season.
Altcoins are showing strength in patterns that mirror previous bull market cycles despite Bitcoin's major moves. We have had explosive moves these past few weeks, shown in the Altcoin Signal that has spiked over to the highest levels in Altcoin Season as bitcoin dominance starts to drop.
Bitcoin's current relative strength index (RSI) is at 66, indicating a neutral to bearish sentiment as the market gets overheated. Traders and investors looking to capitalize on recent profits may take these indicators as cues to navigate through a period of market consolidation.
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