In Compass' previous analysis, we anticipated that Bitcoin would not break the $100K level, identifying it as a profit-taking zone with the potential to turn into a bull trap.
This is a tricky area where both longs and shorts are at risk of getting trapped. The wisest approach is to wait for a price correction or consolidation that lasts until Monday, before planning new entries.
Now that Bitcoin has corrected, the key question is whether the correction has concluded and what setup to consider for identifying new market entry opportunities. Let’s dive in.
November Rain.
Bitcoin is on the verge of closing what could be one of the best months in its history—not just in terms of price, but structurally as well. The breakout from a more-than-seven-month accumulation range has made Bitcoin's technical setup tremendously bullish.
Adding to the fundamentals and positive news we've discussed in past analyses is MicroStrategy's recent purchase of BTC, bringing its holdings to an astonishing 386,700 BTC. It likely won't be long before other companies seek to replicate this acquisition model championed by Michael Saylor’s leadership.
A price correction is not only healthy but necessary, creating new opportunities to enter the market. Just a week ago, as Bitcoin entered a parabolic trend, such a chance seemed distant. Now, any price below $100K before another potential breakout upward feels like a gift, akin to "May showers" in the middle of November.
This week presents macro factors to consider and anticipate, as they could bring notable volatility. We'll analyze what needs to happen for the Altcoin Season to officially begin and layout this week's playbook to help navigate the market’s turbulence while positioning for Bitcoin's journey to $100K and beyond.
Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.
How is Bitcoin’s Health?
The components of the Bitcoin Fundamental Index, network growth, and liquidity are at their highest levels this year, highlighting the fundamental strength with which Bitcoin is approaching the $100k milestone. Several factors contribute to this fundamental robustness.
BFI Components: Network Growth & Liquidity.
In relation to its hash rate, Bitcoin is fundamentally strong, achieving another all-time high. The network of miners, as we have observed, is in a neutral mode concerning Bitcoin sales and outputs.
BTC Mean Hash Rate.
Looking at On-Chain Fundamentals, we can see that we are above the year's highs, further supporting this fundamental strength. Observe how there is a favorable balance between inflows and outflows, which aligns with the previous analysis.
On-Chain Fundamentals.
The MVRV ratio indicates that most traders and investors are in profit and that the trend remains bullish, though today's correction might slightly affect this. However, it will not change the overall bullish trend.
MVRV Momentum Oscillator.
How long until the Altcoin Season?
It’s becoming a trend to see highly active weekends where altcoins take the spotlight in the market, while Bitcoin plays a more subdued role. This setup, where altcoins see higher trading volumes,...
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