Bitcoin Pulls Back as Deja Vu Price Action Continues
Bitcoin (BTC) experienced a classic pullback on November 16th following the Wall Street open, as price action continued to repeat historical patterns. The BTC/USD 1-hour chart showed a descent to $36,470, representing a decrease of over $1,000 in a single day.
This pullback mirrored events from earlier in the week, where bulls were unable to sustain new highs and faced long liquidations. However, the number of liquidations on this day was significantly lower, with approximately $21 million of BTC longs liquidated compared to $120 million on November 14th, according to data from CoinGlass.
Market participants noted the repetitive nature of BTC price action, leaving room for both new highs and a deeper retracement. On-chain monitoring resource Material Indicators stated, “While I maintain my view that the market is due for a correction, we still can’t rule out the possibility of another attempt at the $38k – $40k range.” The resource added that news of the first United States Bitcoin spot price exchange-traded fund (ETF) would likely serve as a catalyst for such a move, but time constraints on regulatory approval may hinder this possibility.
Looking at the BTC/USDT order book liquidity, sellside liquidity was building at $38,000, while bid volume was only present at $33,000. Pseudonymous trader Horse commented, “The path of least resistance is down for $BTC if we are going by the amount of resting orders waiting to get filled. My thinking is that this recent spike up was easy due to an empty pocket left by liquidations and that anyone waiting for the dip passively added long at market.”
Dollar Weakness Supports Crypto Outlook
The macro picture was cool on the day as U.S. dollar weakness reentered the market, offsetting a recovery from a significant drop on November 14th. This weakness was driven by U.S. inflation data, which exceeded expectations and provided a positive surprise for risk assets. The U.S. dollar index (DXY) fell to near its lowest levels since September, reaching around 104.
Popular trader Bluntz reacted to the dollar’s decline, stating, “DXY got slaughtered today, would say I’m surprised, but I’m not really, going much lower. Don’t underestimate how GOOD this is for crypto.”
Disclaimer: This article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making a decision.