Bitcoin remains prone to volatility, while further downside offers the “path of least resistance” for BTC price next, analysis warns.
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Bitcoin (BTC) saw a classic pullback after the Nov. 16 Wall Street open as deja vu BTC price action continued.
Analysis: Door open to deeper BTC price correction
The landscape closely followed events from earlier in the week, where bulls failed to flip new highs to support and endured long liquidations.
These were less present on the day, with around $21 million of BTC longs wiped out at the time of writing, per data from monitoring resource CoinGlass. On Nov. 14, the tally reached $120 million.
Commenting on the status quo, market participants noted the repetitive nature of BTC price action, which left the possibility for both new highs and a deeper retracement open.
“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,” on-chain monitoring resource Material Indicators wrote in part of its latest X post.
It added that news on the first United States Bitcoin spot price exchange-traded fund (ETF) “would be a likely catalyst for such a move,” but that time was running out for this thanks to regulatory time constraints.
An accompanying snapshot of BTC/USDT order book liquidity showed sellside liquidity building at $38,000, with complementary bid volume only present at $33,000.
“The path of least resistance is down for $BTC if we are going by the amount of resting orders waiting to get filled,” popular pseudonymous trader Horse continued on the topic.
“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 bolsters crypto outlook
The macro picture was cool on the day as U.S. dollar weakness reentered, cancelling out a recovery from a precipitous drop on Nov. 14.
This came at the hands of U.S. inflation data, which came in more positive than expected in a complimentary surprise for risk assets.
The U.S. dollar index (DXY) was back near 104 — near its lowest levels since the start of September.
“DXY got slaughtered today, would say im surprised, but im not really, going much lower,” popular trader Bluntz reacted to the previous move.
“Don’t underestimate how GOOD this is for crypto.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.