Is market strength finally returning?

BTC entered last week with weakness and was pressed down by the anticipation of court’s approval to liquidate FTX assets (due on Wednesday), resulting in selling to front-run it.

Early in the US session, pressure intensified and BTC broke $25,300 support, which had been defended in previous weeks and the market started getting closer to key LT $24,800 level.

There was lots of absorption from the bids on the approach and sellers struggled to attack it for hours on Monday.

Eventually on Tuesday, BTC flipped back above $25,300 and accelerated higher, fueled by short-covering to reverse its Monday down-move.

Later, news about Franklin Templeton filing for a spot bitcoin ETF hit the wires and pushed the market further up.

On Wednesday, US Aug CPI released stronger than expected but caused only a muted and short-lived reaction to the downside.

Later in the US session, court approval was announced to sell FTX crypto assets but again,  initial selling pressure didn’t last long and it was reversed by the end of the day.

Buying pressure continued and BTC printed a new high of the week on Thursday.

On Friday, the stock market sold off aggressively, which weighed on crypto.

Even though BTC was moving down, retracing the up move from the day before, it was showing lots of resiliency.

Eventually, it turned back up and we had another leg up with weak shorts being squeezed again.

The market printed a weekly high at $26,900, edged down and traded sideways around $26,500 over the weekend to finish the week there.

Last week was finally good for BTC and it managed to close above the previous week high.

It’s still in the $24,800 - $27,000 range but directional resolution seems likely soon.

BTC almost touched both bands last week – first the lower one on Monday, and then the upper one on Friday, and since then it has been consolidating just below.

We’ve seen positive developments in the markets over the last few days.

Not only have trading activity and volume been picking up, but we’ve also had signs of strength on BTC.

Since the sell-off to $24,800, the market has been trending up with higher highs and higher lows.

In the lower time frame, we’ve seen buying programs entering the market with aggressive bids absorbing any selling attempts and pushing the market up to target liquidity above daily/weekly highs, followed by retracement (sometimes quite sharp) before another move up.

Let’s see if we have similar patterns this week too.

The way that the market reacted to bearish news and downward pressure on other risk assets last week was another sign of the market strength.

We had a muted downward reaction (the market didn’t want to go down) with subsequent moves to the upside.

It shows the significance of making trading decisions not on the data itself (bullish or bearish) but based on how it’s absorbed by the market, as that really shows you who is in control and what the next most likely move is going to be.

Key level to watch now from the upside is $27,000, which is current range high.

We had deviation above it two weeks ago, when we cleared liquidity swiftly above $28,000 before we came back below $27,000.

Breakout of that level and reclaim from above is very important for bulls.

Then the same above $28,000 (with some challenges at $27,500) would give even more confidence and open the way for further increases to test ’23 highs.

From the downside, the most important is $24,800.

First challenge on the way there is $26,200, which is the last higher low in the up-move that we’ve had since last Monday and important for the current bullish structure to hold.

After that, we have $25,800, $25,600 and $25,300.

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