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This is a technical analysis post by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Bitcoin traders, pull the monthly candlestick chart, which waves the white flag of indecision like never before, and the October candle says it all.
The October candle represents a massive trading range, from around $103,600 all the way up to over $126,000. That’s a bigger spread than the previous three months combined! However, BTC ended October with a modest 3.8% dip. When prices swing wildly but end the period concerned close to where it started, it’s what some traders call an “indecision candle.”
A bull will see this as base building – a quiet moment before the next big leap. It is possible because BTC’s ongoing bull run since the beginning of 2023 has been a classic “scale” demonstration.. Also, historically BTC tops tend to form sudden inverted V-shaped movements. So maybe a bullish steam is gathering. But there is a catch.
This indecision happened at a key point: the trend line that connects the all-time high of bitcoin from 2017 and 2021. The record high is where buyers usually flex muscles, but now, they hesitate. And the monthly MACD histogram, an indicator used to gauge the strength of the trend and changes, confirms this slowdown in upward momentum, as it produces smaller peaks above zero instead of new highs.
In particular, last month’s new price high did not receive MACD’s blessing, creating a bearish divergence that echoes the warnings seen at previous peaks, such as the famous 2021 high.
Throw in the fact that this uncertainty persists despite bullish news like Fed rate cuts and better US-China trade relations, and the case for the bulls starts to look shaky.
And if that’s not enough, bitcoin’s stuck-in-the-mud feeling right now mirrors the indecision we’re seeing in the US dollar index (DXY) after its own big downtrend. The DXY looks primed for a turnaround and could soon rally, which historically puts pressure on bitcoin’s rally.
Where does that leave us? If momentum wears off and buyers can’t push through resistance, BTC could see a pullback to around $100,000 or lower before testing the next big move. Conversely, a renewed move above $116,000 would be needed to reconsider the bullish outlook.
