Bitcoin has continued its northward march, indicating that the bulls are in no mood to book profits as they anticipate the rally to extend further. Bitcoin’s bullishness has also rubbed on to select altcoins, which have risen sharply in the past few days, raising hopes that an altcoin season may be around the corner.
Bitcoin’s upcoming halving in April and the expectations of a spot Bitcoin exchange-traded fund being greenlighted in early 2024 are two of the main reasons boosting bullish sentiment. Bloomberg ETF analysts James Seyffart and Eric Balchunas said in a research note on November 9 that there is a 90% chance that a spot Bitcoin ETF will be approved by January 10. They also speculated that there was at least an eight-day window when the Securities and Exchange Commission could “potentially approve all 12 US spot Bitcoin ETF applicants, including Grayscale’s GBTC.”
We said in the previous analysis that there was a possibility of resumption of the uptrend as the bulls were not giving up much ground. That happened on November 9 when Bitcoin soared to $37,999. However, the higher levels attracted profit-booking as seen from the long wick on the day’s candlestick. The relative strength index (RSI) has been in the overbought zone for the past several days, indicating that a correction is possible. The first support on the downside is at the 20-day simple moving average (SMA). If bulls want to maintain the momentum, they will have to defend this level with vigor.
A strong rebound off this level will indicate that the bulls continue to buy on dips. That will increase the likelihood of a break above $37,999. The pair may then climb to the formidable resistance of $40,000. Contrary to this assumption, if the price breaks below the 20-day SMA, it will indicate that the bulls are rushing to the exit. That could intensify the correction and pull the price to $33,440.
The deeper the correction, the greater the time needed for the resumption of the uptrend.
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