Bitcoin Teeters on the Edge: Will $60,000 Hold or Is a Correction Coming?

Bitcoin’s Wobbly Performance: Is a Correction in the Cards?

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After a brief flirtation with $63,000, reigniting hopes of an ‘Uptober’ rally, Bitcoin has once again dampened the enthusiasm, dipping back to the $60,000 range. This underwhelming performance has prompted CryptoQuant analyst Aytekin to pose a crucial question: \”Is a final shakeout before the next significant move inevitable?\”

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Bitcoin’s Open Interest: A Warning Sign?

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Aytekin points to Bitcoin’s current position within a high open interest zone, exceeding the critical $18 billion mark. Historically, when open interest levels reach this point, major corrections have followed. The analyst observes a split in market sentiment:

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\”The market seems indecisive in many aspects, with some believing that the next big upside move is on the horizon, while others think BTC’s downward trend remains strong. A common belief is that BTC may need a final shakeout before surging to a new all-time high (ATH).\”

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While funding rates remain slightly above the 200-day simple moving average (SMA), indicating long traders still hold dominance, Aytekin acknowledges that significant price corrections have often occurred when funding rates turned negative, a scenario that hasn’t materialized yet. Despite the potential for a shakeout, Aytekin believes the severity of the correction might be less severe due to the relatively moderate funding rates.

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BTC Price Outlook: A Look at the Charts

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Bitcoin’s recent price action reflects the ongoing market uncertainty as it struggles to break through key resistance levels. Over the past few weeks, Bitcoin has held above the $60,000 mark but failed to make a substantial move towards reclaiming $70,000.

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In the past 24 hours, Bitcoin has declined by 2.9%, currently trading at $60,485. This dip follows the asset’s brief surge to $63,774 earlier in the week, which had ignited optimism for a possible move towards $65,000 and then $70,000.

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Prominent crypto analyst Ali has observed Bitcoin trading within a \”descending parallel channel.\” The recent rejection at the upper boundary of this channel suggests the potential for further downside. Ali notes:

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\”We might see a drop to the middle boundary at $58,000 or even the lower boundary at $52,000.\”

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Ali believes a bullish breakout is improbable unless Bitcoin breaks above the $66,000 level, a price point that has acted as a significant resistance level in recent weeks.

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Only time will tell whether Bitcoin will hold above $60,000 or succumb to a correction. The market’s indecision and the high open interest zone provide ample evidence to suggest a potential pullback. Investors should remain cautious and closely monitor market developments.

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Source: TradingView