Bitcoin Faces Heavy Supply Wall at $117K: Correction or Extended Uptrend Ahead?

Bitcoin opened Thursday at $116,144 and climbed after a slight retracement. It peaked at $117,968 after failing to reach $118,000.

The apex coin is currently trading slightly lower but remains green on the 1-day scale. However, a closer look at the charts reveals that BTC attained its highest valuation since Aug 17. Its recent high came in the wake of the rate cut that failed to impress many.

Apart from price, Bitcoin continues to experience weak spot volume over the last 24 hours. Aside from spots, crypto derivatives are also seeing lesser participation, with the 24-hour trading volume dropping by almost 10%. Nonetheless, BTC open interest grew by 5%.

However, the chart shows no significant change in price on Thursday amid the bullish sentiment across the market. It is also worth noting that it currently holds $117k, which serves as a gateway to either a new all-time high or a new low.

A recent report from Glassnode revealed a significant supply cluster around the highlighted mark. As a result, the apex coin is struggling to break above $118k.

True to this statement, a closer look at the 1-day chart revealed several instances when BTC lingered around this mark or retraced. One of the most recent instances occurred on Aug 22, when it surged from $112,471 to $117,421.

A Breakout From $118k?

The apex coin is currently experiencing a similar trend, as evident in its most recent price movement. However, there are signs that a breakout may happen in the coming days.

Investors currently have more reasons to stage a massive rally. One such is due to the impending expiration of options. Futures are showing signs of short squeezes, and options open interest has reached a record 500k BTC ahead of the September 26 expiry.

Bitcoin must hold trading above $115k to keep the options in the money. This means that the asset must remain above this price mark or higher until the 26th or risk massive retracements afterward.

Additionally, there are significant concerns about corrections following the rate cut’s failure to impress. In a nutshell, the price must surge as high as $120k so that $117k becomes a support, guaranteeing a close above $115k. Nonetheless, the charts indicate a reduced likelihood of such an occurrence.

Bitcoin Long Due For Correction

The 1-day chart reveals that Bitcoin traded between bollinger’s upper and middle bands for an extended period. However, recent price action shows that it’s trading closer to the upper band. Its current action is significant as a breakout above the indicator may signal the end of the uptrend. The upper line currently sits a little above $118k, which may serve as resistance.

Aside from the BB, the moving average convergence divergence had a bullish crossover. However, it prints a slight sell signal at the time of writing. A closer look at the metric shows that the 12 EMA momentum is slowing down, and the histogram is printing small candles. These are the first signs of an impending bearish convergence. 

Based on these indicators, Bitcoin may be gearing up for corrections. Nonetheless, they leave room for short-term increases. This is also reflected in the relative strength index. The metric is at 61 at the time of writing. 

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