Bitcoin’s price went through a near-term pullback that was largely driven by leverage long liquidations. It sent the open interest down $1.5 billion.
There are no signs of aggressive distribution from long-term holders (LTHs) aside from very light selling from the 7-to-10-year cohort. Older coins didn’t send through this pullback.
The cup and handle pattern looks complete with a backtest of the previous resistance at $64.8K, which is now turned into support.
The Technicals
This short-term pullback isn’t concerning. In fact, it’s healthy for the market structure. It’s important to see BTC’s price holding $64.8K during the backtest of support. Still, it’s possible for more liquidations to take place, and we should look for support at $62.4k, $61.8K, $61.3K, and $60K. The momentum on the higher timeframes remains firmly bullish, which suggests significant upside ahead.
It’s important to see BTC making a weekly close above $64.8K to confirm the first major breakout signal to new all-time highs. The current price action suggests that the cup and handle pattern has completed, and we are now seeing a bullish backtest of the previous all-time high, which is now a support. If the support at $64.8K holds, we should expect bullish continuation to the upside towards $70K and $80.5K, which are the next major technical targets to the upside.
The On-Chain
Around $1.5B in open interest was flushed out during the shakeout. The funding rates dropped from a high of .05 to .01 and back towards the neutral levels. The leveraged ratio, despite dropping from .20 to .19, remains relatively elevated.
There were some periodic spot inflows of 1,000 to 2,000 BTC, but the strong demand has been absorbing the supply, causing spot exchange reserves to remain flat. The Mean Coin Age is currently making intraday highs, which further suggests that older coins are not selling during this pullback.
The miner reserves remain flat since the pullback started. Miners are not showing any signs of aggressive distribution. Overall, the trend remains bullish. If the bulls can hold $64.8K during the week, this is likely to complete the backtest and send BTC towards $70K to $80K.
