A rampaging US dollar is adding to the pain for Bitcoin bulls, as investors are undecided about which direction the market will go
Bitcoin (BTC) has started the new week with a rare setback in its Q4 bull run, failing to break through previous resistance.
Following a strong weekend, BTC/USD was rejected twice at $60,000, and has subsequently dropped below $57,000 as market enthusiasm waned.
The stakes are high: some believe that lofty Bitcoin price expectations can still be achieved by the end of the month, while others feel that this bull market will last longer than past ones.
With November appearing increasingly likely to defy expectations and underperform — both in comparison to recent months and previous bull market years — traders and analysts are bracing for a tense but possibly interesting monthly close.
In the final week of a particularly stressful “Moonvember,” Cointelegraph examines five factors that could influence BTC price action.
$60,000 flips to resistance
For the majority of the weekend, experts’ sentiment was simple: “it could be worse.”
BTC/USD recovered some of its losses after hitting five-week lows of $55,650, and on Saturday even “gapped higher” to attempt a swipe at $60,000.
This was also failed, but on Sunday, a new attempt was made, with Bitcoin briefly trading in the $60,000 range until a hard rejection sent the market falling once more.
$57,000 is establishing a focus as of Monday’s writing, with the evident impetus that what was once firm support has changed to resistance.
The atmosphere was described by popular trader Pentoshi, who reiterated his wish for $61,000 to be reclaimed as support for bullish continuation.
$BTC why 61k important?
Bc support bc came resistance. Hence the focus on that area for me for now.
Here is another way to look at it.
What do I want? I want it over 61k. Does the market care what we want?
No.
61,000 United states dollars for return of the bull pic.twitter.com/egMRfuLxfV— Pentoshi Won’t Dm You. hates Dm’s. DM’s are scams (@Pentosh1) November 22, 2021
Hodlers have had negative returns of -6.5 percent so far in November 2021, making it one of only three Novembers in Bitcoin history to fail to produce gains.
Other years have experienced significant price changes, according to Cointelegraph, like 2020, when BTC/USD surged about 43 percent in November.
Despite this, the drop on Sunday was able to close the current CME futures gap that had opened on Friday, which has become a recurring characteristic of spot price activity this month.
Crypto Ed, a fellow trader and analyst, believes that this is exactly what was needed to improve the chances of new upside in the coming week.
In part of his Twitter comments on Sunday, he added, “Waiting for another leg down to fill CME tonight and up from there in the next days.”
Surprising parallels
Despite the aggravation of a Bitcoin correction occurring at the most inconvenient time, not everyone is surprised — or concerned.
Short timeframes can present a very different picture of market health than longer ones, and it’s these that analysts are looking at this week to back up their bull thesis.
“If you doubt, zoom out” – Bitcoin is still on schedule despite two years of block subsidy halvings.
Analyst TechDev stated Sunday that the BTC 8H has “remarkably identical correction structures as far.”
“Almost to the day 4 years apart. 2021 continues to run 5-8 days behind 2017 since July.”
TechDev cited statistics that showed Bitcoin not only matched its 2017 performance this year, but also nearly replicated the timeframes for each part of its bull market.
If this trend continues, the expected blow-off top phase will emerge — only this time, it will be an order of magnitude larger than the $20,000 seen in 2017.
A graph also shows how Bitcoin’s relative strength index (RSI) is repeating its 2017 performance, particularly in November.
Bull cycle tops are typically accompanied by an RSI reading of 90 or higher, which is significantly higher than the current reading on lower timeframes.
On a $60,000 rematch, funding increases.
Despite losing the battle for $60,000, the practice of attempting to exit lower levels has had an adverse influence on derivatives markets, where traders are once again boosting leverage.
Funding rates are moving again after being virtually “reset” to neutral at last week’s lows.
Overconfidence, as shown on Bybit, OKEx, and other exchanges at the time of writing, indicates a bullish bias, or the expectation of more gains.
This can have unfavorable consequences, as a price drop unravels a huge number of positions, causing a snowball effect that drives prices even lower.
However, liquidations have been few thus far, with $70 million in Bitcoin and $219 million spread throughout crypto exchanges in the last 24 hours.
“Thinking liquidations, thus the question is which side of the market gets ran this week,” blogger 52skew noted on Twitter Monday, referring to the retest of $60,000.
The market is hungry for liquidity, decreasing buy and sell volume.
(reflects most market participants are waiting for confirmations or hedged)
Thining liquidations so question is which side of the market gets ran this week. https://t.co/tpnOsyGErZ pic.twitter.com/Hk4RIfGIiM— Δ (@52kskew) November 22, 2021
