The price of Bitcoin suffered a short-term pullback that was largely due to the leverage of long sell-offs. It sent the open interest down $1.5 billion.
There is no sign of aggressive distribution from the Long Term Holders (LTHs) other than very light sales from the 7-10 year cohort. Older coins did not undergo this shrinkage.
The cup and handle pattern looks complete with a backtest of the previous resistance at $64.8K, which is now turned into support.
The techniques
This short-term decline is not of concern. In fact, it is healthy for the structure of the market. It’s important to see BTC’s price holding $64.8K during the backtest of support. Still, there is a possibility that more closeouts will take place, and we should be looking for support at $ 62.4,000, $ 61.8,000, $ 61.3,000 and $ 60,000. The momentum on the higher timeframes remains firmly bullish, which suggests significant upside ahead.
It is important to see BTC close each week above $ 64.8,000 to confirm the first major break signal at 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 a further bullish continuation towards $ 70K and $ 80.5K which are the next major technical targets on 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 debt ratio, although it fell from 0.20 to 0.19, remains relatively high.
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 average age of coins is currently hitting intraday highs, further suggesting 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 $ 64.8,000 during the week, that will likely complete the backtest and send BTC towards $ 70,000- $ 80,000.
