A slow, grinding upward drift has been the name of the game for bitcoin’s market over the last few weeks. The upward drift is bringing us slowly to a level that was previously rejected violently:
Figure 1: BTC-USD, Daily Candles, Upward Drift[1]
Our third rejection of the red resistance level shown above brought the market into a test of macro support in the mid-$3,000s. After several tests of the support level, the market began to slowly drift upward in a stair-stepping manner. This upward drift is a change of character in price action. Prior to this drift, the market was quite volatile, with both upward and downward impulses. The three prior rejected tests shot into the level aggressively (a sign of strong demand) but got spat out aggressively (a sign of strong supply). Our fourth time is quite different, though — rather than shoving into the level aggressively, it is slowly grinding. Slow upward grinds are often a sign of weakening supply and persistent demand.
So far, our market has managed to hold macro support and has even managed to hold above the previously rejected level (outlined in black in Figure 1). Now, we are beginning to see the real test of supply as we enter the prior levels that were rejected:
Figure 2: BTC-USD, Daily Candles, Prior Rejected Levels[2]
If we look at the rejected levels individually, we can form discrete layers of resistance that the market will need to overcome if the bulls are going to overwhelm the market’s supply. At the time of this writing, we are in the process of testing the lowest level (shown by the red dashed line in Figure 2). A decisive close above that level would be a nice step
