Bitcoin (BTC) experienced a significant pullback after the Wall Street open on November 16th, continuing its déjà vu price action. Data from Cointelegraph Markets Pro and TradingView revealed that Bitcoin descended to $36,470, marking a decrease of over $1,000 in a single day.
This recent price action was reminiscent of events earlier in the week, where bullish attempts to establish new highs failed, resulting in widespread long liquidations. Although there were fewer liquidations on the day of the pullback, approximately $21 million worth of BTC longs were wiped out at the time of writing, according to data from CoinGlass. In contrast, on November 14, the tally reached $120 million.
Market participants observed the repetitive nature of BTC price action and pointed out that the possibility for both new highs and a deeper retracement remained open. Material Indicators, an on-chain monitoring resource, expressed this sentiment in its latest analysis, stating that while a market correction remains likely, the possibility of another attempt at the $38k – $40k range cannot be ruled out. However, the analysis noted that the window for such a move was closing due to regulatory time constraints involving the first United States Bitcoin spot price exchange-traded fund (ETF).
The accompanying snapshot of BTC/USDT order book liquidity revealed that sellside liquidity was building at $38,000, with bid volume only present at $33,000. A popular pseudonymous trader known as Horse suggested that the path of least resistance for BTC is downward, as indicated by the amount of resting orders waiting to be filled.
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The macro picture on the same day showed U.S. dollar weakness reentering the market, counteracting a recovery from a steep drop on November 14. This weakness was attributed to the U.S. inflation data, which was more positive than expected, offering a surprise boost to risk assets. As a result, the U.S. dollar index (DXY) hovered near 104, marking its lowest levels since the start of September.
In response to the weakening U.S. dollar, a popular trader named Bluntz stated that the downslide of the DXY was positive for crypto. This sentiment was echoed by many in the industry, emphasizing the potential benefits of a weaker dollar for the cryptocurrency market.
This article serves as an observation of recent Bitcoin price action and U.S. dollar weakness and does not contain investment advice or recommendations. As with any investment and trading decision, it is essential for readers to conduct their own research.
