Originally published on: October 23, 2024
Bitcoin’s price has experienced a 3% decline following a strong weekly performance, sparking concerns about a potential re-test of the $60,000 level. The cryptocurrency’s daily chart is showing a bearish engulfing pattern, historically signaling a reversal with a success rate of 60% to 70%.
Recent bearish engulfing patterns near range highs have led to steep corrections over the past seven months, with drawdowns as deep as 26%. Combined with ongoing concerns in the futures and derivatives market, where open interest exceeds $40 billion, BTC’s price faces downward pressure.
The negative spot orderbook cumulative volume delta (CVD) further indicates a lack of spot buyers, aligning with bearish signals from open interest and engulfing patterns. These factors suggest a potential drop to $60,000 in the near future.
Institutional investors may be cooling off their enthusiasm for Bitcoin, as US ETF outflows totaled $79.1 million on Oct. 22 after a previous $81.1 million outflow on Oct. 10. Despite recent inflows totaling $2.6 billion and an all-time high in assets under management, the market is currently facing resistance.
While this analysis does not constitute investment advice, it highlights the current challenges facing Bitcoin as it navigates key price levels and market dynamics. Stay tuned for more insights and updates on the cryptocurrency market.
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