$60K becomes resistance — 5 things to watch in Bitcoin this week

Bitcoin (BTC), which begins a new week, is disappointed in its Q4 bull market — it failed to break previous support.

BTC/USD saw rejection at $60,000 two times after a promising weekend. Since then, it has fallen below $57,000 as market momentum wanes.

There are many stakes: Some believe that the sky-high Bitcoin price targets will still be met at the end of the month. Others believe that the bull market will take more time to develop than the previous one.

Analysts and traders are preparing for an interesting, but nerve-racking, monthly close as November looks more likely to defy tradition and deliver — both in comparison to the bull market years of recent months.

Cointelegraph examines five factors that could influence BTC’s price action during the last week of “Moonvember,” a highly stressful month.

Flip $60,000 to Resistance

Analysts were adamant that it could get worse for most of the weekend.

After falling to $55,650 for five weeks, the BTC/USD recovered some of its losses and took a swing at $60,000.

However, the attempt was unsuccessful. Sunday saw Bitcoin enjoy a brief moment in the $60,000 range, before a firm rejection sent it crashing once more.

As of Monday’s writing, $57,000 was forming a focal point. This is clearly indicating that once strong support has become resistance.

Pentoshi, a popular trader, summarized the mood and reiterated his desire to regain $61,000 as support for bullish continuation.

$BTC Why is 61k so important? Support bc brought resistance. That is why I am focusing my attention on this area. Another way to view it. What do you want? It should be more than 61k. Is the market interested in what we want? No. 61,000 United states dollars for return of the bull pic.twitter.com/egMRfuLxfV
— Pentoshi Won’t Dm You. Dm’s are a hateful thing. DM’s are frauds (@Pentosh1) November 22, 20, 21

November 2021 so far has delivered negative returns of 6.5% for hodlers. This makes it one of three Novembers that have not produced gains in Bitcoin’s history.

Cointelegraph reported that other years have witnessed transformative price actions, not least 2020 when BTC/USD rose almost 43% in November.

However, Sunday’s downturn did fill the CME futures gap that was created Friday. This has been a regular feature of spot price action in this month.

Crypto Ed, a fellow analyst and trader, believes this is the best thing that could happen in order to increase the chances of new upside coming back in the next week.

He said part of his Twitter comments Sunday, “Waiting to get another leg down for CME tonight and up again the next days,”

CME Bitcoin futures 1-hour candle charts showing gap Source: TradingView

Uncanny resemblances

Despite the frustration caused by a Bitcoin correction at the worst time, not everyone is shocked or concerned.

Market health can be portrayed in shorter time frames than longer ones. This week, commentators will be looking at these short-term indicators to support a bull thesis.

“If in doubt zoom out” — Bitcoin’s performance in the two years prior to block subsidy halvings is a far cry from its previous years. However, it continues to be on track.

TechDev analyst confirmed that there were “remarkably similar corrective mechanisms so far on BTC 8H.”

“Almost to 4 years apart. Since July 2017, 2021 is still running 5-8 days behind 2017.

TechDev referenced data that showed that Bitcoin not only repeated its 2017 performance, but also copied practically the time frames for each phase of its bull markets.

If this continues, the blow-off top phase predicted for 2017 should also occur — but this time it will be an order of magnitude greater than 2017.

BTC/USD chart annotated comparison with RSI highlights. Source: TechDev/ Twitter

The chart also shows how Bitcoin’s relative strengths index (RSI), is copying its November 2017 performance.

Bull cycle tops typically include an RSI reading above 90, which is far higher than the current reading for lower time frames.

Funding rises on $60,000 rematch

Despite losing the fight for $60,000 the process of trying lower levels to exit has had an adverse impact on derivatives markets where traders are increasing their leverage.

Funding rates have moved again after being “reset” to zero last week during the lows.

Overly positive sentiments, such as the one seen in Bybit, OKEx, and other stocks at the time, suggest a bullish bias. It is the expectation of further gains.

This can lead to undesirable outcomes, such as large numbers of jobs being lost due to a price decline. The snowball effect drives prices down further.

Despite the fact that liquidations have been slow, Bitcoin has seen $70 million in Bitcoin, and crypto markets saw $219 million in 24 hours.

“Thinking liquidations so question which side of market gets run this week,” 52skew wrote on Twitter Monday. He also noted what happened at the retest of $60,000.

Market liquidity is in short supply, with decreasing buy and sale volumes. (reflects that most market participants are still waiting for confirmations or have their positions hedged. Thin liquidations mean that it is unclear which side of this market will be run this week. https://t.co/tpnOsyGErZ pic.twitter.com/Hk4RIfGIiM
— D (@52kskew November 22, 2021

The open interest in Bitcoin futures has not yet surpassed all-time highs that were set prior to the Nov. 10 dip.

Dollar is the star of this show

The macro markets continue to show mixed results from nervousness about Coronavirus measures and protests to them.

Inflation is already on the radar so talk now turns to the U.S. Federal Reserve raising the pace of asset purchase tapering next month.

“If that idea is repeated, it will increase the likelihood that the tapering announced in December will be faster than that which was announced early November,” Jason Schenker (president and chief economist at Prestige Economics), told Bloomberg.

The U.S. Dollar is however the star of the week.

According to the U.S. currency index (DXY), the greenback has overcome longstanding resistance to make it its strongest month since July 2020.

DXY gains usually have an opposite effect on Bitcoin. Bitcoin struggles during these periods. November was no exception. DXY swaps have been booming and the reading has been 96.

DXY 1-day candle charts. Source: TradingView

“The problem? Analyst Helene Meisler warned that sentiment was becoming increasingly extreme in FX Land.

Inverse correlation with BTC would be tested if DXY is turned around.

Sentiment suggests “wait and watch”

Investors are not on the same page about market mood in crypto.

Related: Top 5 Cryptocurrencies to Watch This Week: BTC. AVAX. MATIC. MATIC. EGLD. MANA.

According to the latest Crypto Fear and Greed Index readings, the market remains neutral despite the volatility of the short-term prices.

Fear & Greed, at 50/100, is right in the middle of its range of possible values. This highlights a lackluster “extreme” sentiment.

This could be a positive for Bitcoin, as last week’s shakeout pushed sentiment back into “fear” territory. Bitcoin has since recovered.

Crypto Fear & Greed Index. Source: Alternative.me

Compare that to the traditional markets’ Fear & Greed Index, and you will see the contrast: the former was characterized by extreme greed at the previous close. However, the “greed” remains.