- November 30, 2023
- Posted by: [email protected]
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Bitcoin, which is currently holding steady at $38,000 on November 29, is facing warnings of potential market corrections as it eyes the $40,000 milestone, with analysts closely monitoring whale activities. Despite reaching 18-month highs and maintaining a grip on higher levels, concerns arise about large-volume traders potentially leaving late-long positions stranded at the peak.
The excitement surrounding Bitcoin derivatives, pushing futures markets to $39,000, has sparked debates about the impact of these speculative activities. Keith Alan, co-founder of the monitoring resource Material Indicators, cautioned traders about potential “whale games,” emphasizing the need to stay vigilant amid price fluctuations. He pointed out a specific instance where liquidity at $38,000 was pulled to open the door to $38,500, suggesting strategic moves by significant players.
Alan also mentioned Jerome Powell, the chair of the United States Federal Reserve, giving a speech on December 1 as a potential catalyst for Bitcoin’s price action, potentially propelling it beyond $40,000. However, he warned that whales might take advantage of this key level to initiate a sell-off, advising traders to be prepared for potential local lows.
Examining the market composition, popular trader Skew expressed confidence in the possibility of further short-term upside, with the only missing element being increased trading volume to trigger a breakout toward the $40,000 threshold. According to a chart that accompanied the analysis, order book sell-side liquidity was concentrated at $38,500, a level yet to be challenged at the time of writing.
Leading up to Powell’s speech, crucial U.S. macro data, including Q3 GDP and the October print of the Personal Consumption Expenditures Index, will influence market sentiment on November 29 and November 30. The market had previously assumed no further interest rate hikes in December due to inflation abating faster than expected. However, Bill Ackman, CEO and founder of hedge fund Pershing Square Capital Management, predicted a potential shift in Fed policy, expecting rate decreases in early 2024 to prevent a hard landing for the U.S. economy.
As Bitcoin continues its price ascent, influenced by both technical factors and broader economic indicators, market participants are advised to navigate cautiously amid the potential influence of significant players and macroeconomic events.
