Why Bitcoin Traders Should Watch Out for the $33,698 Support

Following a tremendous increase that pushed Bitcoin (BTC) above $35,000, the coin could be getting set for a halt on the rally. This October, BTC gained almost 30%, ensuring that the Year-To-Date (YTD) performance was almost at a 100% hike.

However, Julio Monero, who is the head of research at CryptoQuant noted that it could take some time before BTC gets back to $35,000. Monero, backed this inference up by, showing how Short-Term Holders (STHs) have been increasingly selling some of their coins for profits lately.

After the recent #Bitcoin price rally we can see two interesting developments On-chain:

– Short-term holders are “selling” at the highest profit margin since April.

– Whales are “spending” at the highest level since June.

This could be consistent with a pause in the rally. pic.twitter.com/aaoVhCotWl

— Julio Moreno (@jjcmoreno) October 27, 2023

If the profit-taking continues, then BTC may drop below $34,000. Interestingly, as STHs continue to sell, whales have been spending their Bitcoin. According to Monero, these large investors are almost on the verge of surpassing the high-level distribution experienced in June. Considering both scenarios, BTC risked dropping from its current value.

Time to Take Profits

The BTC/USD 4-hour seemed to align with the viewpoint that the rally may stop. This is because the Awesome Oscillator (AO) was decreasing at a fast rate. This drawdown implies that buying momentum has reduced and a sizable part of the market is collecting gains made over the last 30 days.

Meanwhile, bulls seem to be establishing a support at $33,698. If sellers do not quench the strength at the price, then BTC, no matter the selling pressure, may not go down more than 10% to 15%.

At the same time, there’s a resistance that traders may need to watch at $34,895. To break the resistance, a lot of buying pressure has to appear.

BTC/USD 4-Hour Chart (Source: TradingView)

The Side to Choose Is Long

The Accumulation/Distribution (A/D) line has also been increasing (as shown above). This hike, if sustained, could invalidate the bearish thesis while leading to an upward breakout. Therefore, it is likely that the Bitcoin fall is short-lived, and recovery to $35,000 could soon be on the way.

On the derivatives end of the market, Coinglass showed that traders are choosing to side with a bullish bias for Bitcoin. This was revealed by the long/short ratio. The long/short ratio provides a collective outlook of the sentiment in the market.

BTC Long/Short Ratio (Source: Coinglass)

Values of the long/short ratio less than 1 mean most positions are bearish. But when the metric is above 1, it means, there’s a bullish sentiment with more positions tilting to the upside. At the time of writing, the Bitcoin long/short ratio was 1.16, implying that traders are confident of a BTC recovery.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

Source