$ 60,000 Becomes Resistance – 5 Things To Watch In Bitcoin This Week

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Bitcoin (BTC) begins a new week with rare disappointment for its fourth quarter bull run – failing to break previous support.

After a promising weekend, BTC / USD was finally thrown twice at $ 60,000 and has since fallen below $ 57,000 as market momentum falters.

The stakes are high: some believe that the very high Bitcoin price targets can still be met by the end of the month, while others believe that this bull market will take longer to unfold than the previous ones.

As November seems increasingly likely to break tradition and under-deliver – both compared to recent months and past years of the bull market – traders and analysts are bracing for a nerve-racking but potentially interesting.

Cointelegraph examines five factors that could shape BTC price action during the last week of a particularly stressful “Moonvember”.

$ 60,000 turns to resistance

For most of the weekend, the mood among analysts was simple: “It could be worse.”

After hitting its lowest level in five weeks at $ 55,650, BTC / USD managed to recoup some of its losses, and on Saturday itself “widened further” to $ 60,000.

It ultimately failed, but Sunday saw another attempt, with Bitcoin enjoying a few brief minutes in the $ 60,000 range before a firm rejection brought the market down again.

At the time of writing on Monday, $ 57,000 is focusing, with the clear impetus that what was once strong support has turned to resistance.

Popular trader Pentoshi summed up the mood, reiterating his desire to recover $ 61,000 to support the continuation of the uptrend.

$ BTC why 61k important?

Bc support bc came resistance. Hence the emphasis on this area for me at the moment.

Here’s another way to look at it.

What I want? I want it over 61k. Does the market care what we want?

No.

US $ 61,000 for the return of the bull pic.twitter.com/egMRfuLxfV

– Pentoshi won’t dim you. hate Dm. DMs are scams (@ Pentosh1) November 22, 2021

So far, November 2021 has generated negative returns of -6.5% for hodlers, making it one of the three months of November in Bitcoin’s history that has failed to produce gains.

As Cointelegraph reported, other years have seen transformative price action, most notably in 2020, when BTC / USD climbed nearly 43% in November.

Sunday’s slowdown nonetheless managed to close the last CME futures gap created on Friday, which again became a feature of spot price action this month.

For Crypto trader and analyst Ed, this was expected to happen to increase the odds of a return to the upside in the new week.

“While waiting for another step to fill CME tonight and then again in the days to come,” he said in part of the comments on Twitter on Sunday.

CME Bitcoin Futures One hour candle chart showing the spread. Source: TradingView Strange Similarities

Despite all the frustration of a Bitcoin correction just when it’s least welcome, not everyone is surprised – or worried.

Short lead times can paint a completely different picture of the health of the market compared to longer lead times, and these are the ones commentators are considering supporting a lasting bullish thesis this week.

“When in doubt, zoom out” – compared to its performance in its previous two years after halving global subsidies, Bitcoin remains on track.

“Remarkably similar corrective structures so far on BTC 8H,” analyst TechDev confirmed on Sunday.

“Almost to the day at 4 year intervals. 2021 continues to be 5 to 8 days behind 2017 since July.”

TechDev referred to data showing that Bitcoin not only repeated its performance of 2017 this year, but also practically copied the timeframes of every phase of its bull market.

If this continues, the planned upper blowing phase should also appear – except this time, an order of magnitude higher than the $ 20,000 of 2017.

BTC / USD annotated chart comparison with highlighted RSI. Source: TechDev / Twitter

A chart further shows how Bitcoin’s Relative Strength Index (RSI) is copying and pasting its 2017 performance in November in particular.

Typically, highs in bull cycles are accompanied by an RSI reading of 90 or higher, which is far from the current reading on lower time frames.

Funding increases on rematch of $ 60,000

Despite losing the battle for $ 60,000, the process of trying to break out of lower levels has had an unfortunate impact in the derivatives markets, where traders are once again increasing leverage.

After effectively being “reset” to neutral at last week’s lows, funding rates are on the move again.

Being too positive, as is the case with Bybit, OKEx and others at the time of writing, suggests a bullish bias – the expectation that further gains are in sight.

This can often have undesirable results, as a drop in prices starts to unwind a large number of positions, with the snowball effect driving prices down even further.

So far, however, the liquidations have remained low-key – $ 70 million for Bitcoin and $ 219 million in the crypto markets in the past 24 hours.

“Closeouts are slim, so the question is which side of the market will be managed on this week,” blogger 52skew summed up on Twitter Monday, noting what happened in the $ 60,000 retest.

The market is hungry for liquidity, which decreases the volume of buying and selling.

(reflects that most market participants are waiting for confirmations or are covered)

Decreasing liquidations, so the question is which side of the market will be managed this week. https://t.co/tpnOsyGErZ pic.twitter.com/Hk4RIfGIiM

– (@ 52kskew) November 22, 2021

Open interest on Bitcoin futures, meanwhile, has yet to break all-time highs set before the November 10 drop.

The dollar is the star of the show

In macro-markets, nervousness over measures against the coronavirus – and the protests that responded to them – continues to present a mixed bag.

With inflation already well on the radar, discussions are now turning to the US Federal Reserve, which is stepping up the pace of its asset purchases by decreasing next month.

“If this idea spreads and is emphasized repeatedly, it will increase the likelihood that the reduction announced in December will be faster than the pace announced in early November,” Jason Schenker, president and chief economist of forecaster Prestige Economics, told Bloomberg.

However, the US dollar steals the show this week.

The greenback broke long-standing resistance this month to reach its strongest since July 2020, according to the US Dollar Currency Index (DXY).

Typically, steep DXY gains have the opposite effect on Bitcoin, which struggles during such times. November was no exception as DXY swaps needed a hike and held a reading of 96.

1-day DXY candle chart. Source: TradingView

“The problem? The feeling is getting very extreme in the fx land,” warned analyst Helene Meisler over the weekend.

A reversal of the unusually volatile DXY would conversely provide an inverse correlation test with BTC.

The feeling says “wait and see”

As for the mood of the market, within crypto investors are on the close.

Related: Top 5 Cryptocurrencies To Watch This Week: BTC, AVAX, MATIC, EGLD, MANA

The latest reading of the Crypto Fear & Greed Index shows that despite short-term price behavior, the market is in fact completely neutral.

At 50/100, Fear & Greed is right in the middle of its range of possible values, indicating a lack of “extreme” sentiment.

This could work in Bitcoin’s favor, as last week’s upheaval returned sentiment to ‘fear’ territory from which it has now recovered.

Crypto fear and greed index. Source: Alternative.me

Compare that to the Fear & Greed Index of traditional markets and the dichotomy is clear: “extreme greed” characterized the latter at the previous close, and now “greed” remains.

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