Bitcoin's Price Odyssey: Navigating the Waters of $34,000 and Beyond

The price of Bitcoin (BTC) experienced a subtle downturn, dipping below the $34,000 mark shortly after the opening of Wall Street on October 26th. This occurrence is part of a broader ongoing consolidation phase that has held steady at 17-month highs.

BTC/USD 1-hour chart. Source: TradingView 

$33,000 emerges as the make-or-break price level for BTC

BTC's price exhibited some intraday lows, reflecting the natural ebb and flow of the cryptocurrency market. In its recent ascent, it made an admirable attempt to ascend higher, only to find its progress halted by persistent sell-side pressure, leaving $35,200 conspicuously unattainable as a formidable resistance level.

To gauge the likely direction of the market, we must adopt a patient approach and attentively monitor the development of price candles. A deeper understanding can be derived by scrutinizing the intricacies of liquidity placement within the order book, as thoughtfully suggested by Material Indicators in their latest update on the X platform (formerly known as Twitter).

In the grand tapestry of market dynamics, historical data reveals that the side of the market with the greatest concentration of liquidity nearest to the active trading zone tends to dictate the course of action. Currently, both sides of the market exhibit comparable liquidity concentrations, albeit with a slight tilt in favor of the buying side.

Material Indicators has discerned that the pivotal level to watch closely is $33,000. Any price wicks extending below this level, whether preceding or following the monthly candle closure, could potentially jeopardize the ongoing endeavor to establish a bullish breakout.

Considering the intricate dance of the market, it's plausible to envision a short-term price surge to $36,000, with the possibility of extending up to $40,000 before an inevitable correction. However, prudent caution is advised until we witness a solid retest of the $33,000 support level.

BTC/USD order book data for Binance. Source: Material Indicators/X 

Furthermore, there's a prevailing sentiment in the market that a breakout aiming for the $45,000 milestone is already in contemplation, possibly to materialize next month. This perspective is also shared by other respected market analysts, including Michaël van de Poppe, who have shown interest in similar price zones for BTC.

Still interesting to keep an eye on #Bitcoin.

Fighting $34.7K as resistance, through which a breakout there should lead to $37-38K.

On the other hand, areas between $32.6-33.1K, if we get there, areas of longing.

Corrections are usually quite swift in upwards trends. pic.twitter.com/DTOYcoCQIK

— Michaël van de Poppe (@CryptoMichNL) October 26, 2023

One trader, Daan Crypto Trades, noted the current market conditions, describing them as somewhat predatory. The market appears to be oscillating in a state of ambiguity, meting out consequences to those who are overly exuberant with their long or short positions. It appears that market participants are in a state of anticipation, awaiting a definitive break either below $33,000 or above $35,000.

BTC/USD chart with open interest. Source: Daan Crypto Trades/X

In a related vein, an accompanying chart diligently tracks the ongoing correlation between open interest (OI) and recent price "squeezes," providing valuable insights into market sentiment and activity.

Will the CME gap at $20,000 remain unfilled?

Lastly, it's worth addressing a notable theory within the market regarding a potential return to $20,000. This theory centers on the existence of a singular "gap" in CME Group Bitcoin futures markets, which occurs when BTC/USD commences a new week at a different level than where it concluded the previous Friday. Such gaps tend to exert a magnetic pull on the market, and some market observers speculate about the possibility of a drop to $20,000 to fill this gap. Nevertheless, Credible Crypto, known for his optimism in BTC price forecasts, urges caution and advises not to hold one's breath for such capitulation.

Many months ago, he presciently foresaw the likelihood that this gap would remain unfilled, especially during a market's parabolic ascent. Supporting his viewpoint, he references a chart displaying historical gaps, which was initially shared in March of this year.

CME Group Bitcoin futures chart with gap information as of March 2023. Source: Credible Crypto/X

Read more: Global Frenzy: The Bitcoin Buying Boom