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- Bitcoin may hold on to the support at $35,687, and propel a breakout.
- If BTC falls below the volume-weighted average price, then $35,600 could be a good entry before another rally.
- Open Interest increased as traders are targeting BTC to rise above $45,000 in the mid-term.
Daan Crypto, a trader and analyst, told his 349,200 followers on X that the current market shakeout and Bitcoin (BTC) correction should not dampen the community’s spirit. According to Daan, corrections are normal, especially when upticks have had an extended period of stay.
While preaching caution, he also mentioned that another breakout may be on the way for BTC. Above the post, Daan shared a BTC chart, where he discussed the possible coin performance for the rest of this month.
From the chart shared, Daan noted that Bitcoin, irrespective of selling pressure, may hold on to the $35,687 support. To arrive at this conclusion, the analyst considered the Volume-Weighted Average Price (VWAP).
#Bitcoin We do have a lot of confluence around this region where price has bounced before this month.This diagonal support + Monthly VWAP have proven to support price rather well. Whether it holds or not I have no idea.Let's see if this time is any different. pic.twitter.com/KkcfAPYrCk— Daan Crypto Trades (@DaanCrypto) November 16, 2023
This technical indicator provides traders with the average price of a cryptocurrency within any given timeframe. At the time of writing, the VWAP was $36,101, and Bitcoin changed hands at $36,259, representing a 3.26% increase in the last 24 hours. Should the BTC price drop below the VWAP, then it is likely for BTC to fall under $36,000.
On the BTC/USD 4-hour chart, the Relative Strength Index (RSI) had dropped to 47.86. The RSI reading falling below 50.00 means that the broader market is turning unrealized profits into realized gains. If this profit-taking continues, then BTC may continue to experience a bearish momentum.
The Fibonacci retracement levels also provide insight into Bitcoin’s possible movement. At the time of writing, the 0.786 Fib level was at $35,600. This value could be termed a bearish retracement price for BTC. At the same time, it could serve as an entry point for traders.
BTC/USD 4-Hour Chart (Source: TradingView)
Should Bitcoin hit $35,600, and buying pressure take off, the coin may recover and break out in the $40,000 direction. Meanwhile, Bitcoin open interest has been rising despite the decreasing price action.
Open Interest measures the number of open futures and options contracts connected to an asset. When the Open Interest increases, it implies that more liquidity is being allocated to the contracts and more positions are open.
A decrease in the Open Interest suggests otherwise. At the time of writing, Coinglass data showed that Bitcoin’s Open interest was around $15.70 billion. But when put side by side with the BTC price, the rising Open Interest is a sign that the coin value may continue to pull back.
Bitcoin Futures Open Interest (Source: Coinglass)
Regardless of the point BTC hits, traders are opening positions targeting as high as $45,167. However, for the time being, Bitcoin appears most likely to move in the downward direction.
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