Over the past three weeks, Bitcoin has been in a state of continuous bullish rally, leading to the cryptocurrency reaching a new high of $38k. This process was accompanied by an active accumulation cycle, which increased the number of addresses holding BTC worth $1 million by 237%. At the same time, Tether "printed" over 4 billion USDT, also playing a significant role in the cryptocurrency's bullish movement.
However, after three weeks of prolonged and continuous growth, following the peak at $38k, more signals are emerging in the BTC market indicating the need for a corrective movement. Bullish impulses have become less aggressive, the price is facing strong buying pressure near the high, and some categories of large investors have already started to take profits. Nevertheless, even in such an ambiguous situation, Bitcoin has room for movement.
Consolidation Movement
Essentially, this is the scenario observed since the end of last week when BTC/USD set a local high at $38k. The cryptocurrency's price is locked within a narrow range of fluctuations between $36.1k and $38k. Within this range, there is a local capital redistribution as a significant number of investors are ready to take profits at this stage. However, there are still plenty of buyers willing to purchase the released volumes, so the price maintains the range.
At the same time, it is highly probable that after the release of inflation data, the cryptocurrency's price will move beyond the $36.1k-$38k range. Therefore, it makes sense to consider a broader range of $33k-$36k, which acts as a magnet for the BTC price, as it represents the fundamental accumulation cycle of long-term investors. The most likely scenario is a decrease in the BTC price within this range, moving from level to level within the wider area of $36.1k-$38k.
Correction Scenario
The consolidation scenario will likely trigger a significant deterioration in market sentiment and, as a result, a more global sell-off. In such a case, a full-fledged correction may begin, and a breakdown of the $33.3k-$33.6k level, where the 0.382 Fibonacci level is located, would signal the start of a more profound price decline. In a positive outcome, the $29.8k-$30.1k area would mark the end of the corrective movement.
As of November 6, with the decline in the BTC price to the $30k level, the volumes of liquidated positions reached $1 billion. Over the past week, this figure has increased even more, so bears will try to maximize the potential of the possible correction. Looking at the situation through Fibonacci levels, the key support levels for the BTC/USD price will be at $33.6k (0.382 Fibonacci level), $32.3k (0.5 Fibonacci level), and $30.1k (0.618 Fibonacci level).
Continuation of the Bullish Rally
As of November 14, the cryptocurrency is trading near $36.6k, with daily trading volumes around $18.2 billion. To maintain the upward direction, BTC/USD needs to recover above the $37k level and continue the upward movement beyond $38k. A consolidation above the current local high will give the market additional momentum, and buying volumes will once again significantly surpass sales.
In this case, the bullish rally of the BTC price will continue to the $40k level, where it is most likely to end as significant order volumes for selling are concentrated near this mark. Additionally, $40k is a psychological level that can trigger significant profit-taking, serving as one of the key objectives within the global upward trend. The RSI index has formed a bullish crossover, indicating the likelihood of such a movement.
Conclusion
Regardless of the realization of any of the proposed scenarios, it is important to understand that markets operate in cycles. Bitcoin is closely approaching the end of a bullish cycle, followed by a corrective, restorative movement. Therefore, regardless of investors' reactions to inflation data and other macroeconomic indicators, within the next 30 calendar days, the cryptocurrency will initiate a corrective movement with a minimum target around $33.3k and the potential to reach $29.8k.
