Bitcoin is attempting a recovery after last week’s sharp correction, but the market remains at a major decision point. While the price has bounced, the broader sentiment remains cautious. The key question is whether this bounce is a real reversal or just a temporary relief before another leg down.
Technical Analysis
By Shayan
The Daily Chart
On the daily chart, BTC found support and bounced off the 200-day moving average around $108K. This area has held as strong demand in previous corrections, and used to act as a base for the latest bullish move in September and early October.
However, the asset still hasn’t broken back above the dotted midline of the channel or the 100-day MA, both located around the $115K mark. Until we see a daily close above these two resistance elements, the buyers cannot regain full control.
The 4-Hour Chart
On the 4H timeframe, BTC is testing the descending trendline from the recent high and is currently hovering around the $111K level. The structure is showing a potential breakout, but the price needs to close above the $112K area to confirm a shift in short-term momentum.
The RSI is also pushing toward 60, suggesting growing bullish pressure but not yet overextended. In case the descending trendline breaks to the upside, the price will likely target the $116K resistance zone in the upcoming days. On the other hand, a failed breakout would probably lead to a deeper decline toward the critical $100K demand zone.
Sentiment Analysis
Open Interest
Analyzing the futures market sentiment, open interest is forming a base around 35 billion after a sharp flush, indicating that while some traders are stepping back into leveraged positions, the overall market sentiment is still uncertain.
With the open interest still relatively high compared to recent historical levels, the risk of another cascade liquidation remains, especially if the market breaks below the mentioned resistance levels. If BTC fails to reclaim $115K cleanly, another wave of long liquidations could follow, especially heading into the weekend.
