November 1, 2023
Bitcoin (BTC) price is overheating amid calls for a pullback to allow fresh liquidity to enter the market ahead of the next rebound targeting highs above $40,000. The bellwether cryptocurrency has experienced significant gains over the past year, with a 66.6% increase. However, recent data shows a slight decrease in value over the last 24 hours, trading at $34,370.
While optimism towards the potential greenlighting of Bitcoin spot exchange-traded funds (ETFs) remains high, the hype and discussions around the matter have decreased significantly. Trading volume across most exchanges has also slumped, with BTC recording only $13 billion, down 17% in the last 24 hours.
Bitcoin ETF tickers continue to show up on the Depository Trust & Clearing Corporation (DTCC) website, indicating potential future approval. The latest ticker is from Invesco Galaxy Bitcoin ETF with the ticker ‘BTCO.’ The first ticker belonged to BlackRock’s spot Bitcoin ETF, listed under the ticker ‘IBTC.’ However, the DTCC spokesperson clarified that the tickers are a standard practice and do not indicate approval by the SEC.
The Relative Strength Index (RSI) suggests that Bitcoin is heavily oversold. After reaching highly oversold conditions in August, the RSI entered the overbought region last week but topped out at 87. A gradual correction is expected, with the RSI likely to enter the neutral area below 70. Bitcoin has faced resistance at $35,000 and slipped to $33,384 at some point.
Crypto analysts and investor Rekt Capital agree that Bitcoin price is in consolidation below resistance at $35,000. They predict that the upcoming Federal Open Market Committee (FOMC) decision on interest rates in the US could trigger a minor dive to sweep liquidity as Bitcoin retests $33,000 support. Traders are advised to prepare new entry positions in that area, with the next target being $36.5 - $37k.
Blockchain data analytics platform CryptoQuant warns that BTC is approaching the overheat zone and may retrace before the next significant increase. Historical data shows that when futures open interest (OI) enters the overheating zone, a price decrease follows.
Bitcoin is standing out as a safe haven asset amid geopolitical tensions and falling US Treasury bonds. The ongoing war between Israel and Hamas has led to an increase in BTC as a safe haven. People are losing confidence in government bonds as a safe asset and are turning to Bitcoin and equities. The price of Bitcoin has increased by at least 23% during this period, while the price of a 10-year Treasury note has fallen.
Bitcoin's price is overheating, and there are calls for a pullback to allow fresh liquidity to enter the market. The recent decrease in value and trading volume, along with the consolidation below resistance at $35,000, indicate a need for caution. Traders should prepare for a potential retracement and consider Bitcoin as a safe haven asset amid geopolitical tensions and falling US Treasury bonds.