Bitcoin just dropped roughly 14% from its October 6 high and is now compressing into a support pocket that has fueled past upside legs. With analysts flagging a recurring early‑month pattern and exchange balances drifting lower, traders are asking the right question: is this the dip before the rip, or the start of a deeper rotation?

What Just Happened

After the pullback, Bitcoin is probing its bull‑market support band around the 200‑day and 365‑day SMAs, a zone that has repeatedly launched strong rebounds since the $16K bear‑market lows. Trader Daan Crypto Trades notes that BTC often sets its monthly high or low within the first 6–15 days; November already printed a high on Nov 2 and a low on Nov 3, hinting a potential monthly base may be forming.

Why It Matters to Traders

Structure and flow are aligned—for now. Analyst PlanC frames the current move as a textbook pullback into the bull‑support zone, with the $101,970–$109,881 area highlighted as critical. On‑chain, 208,980 BTC left centralized exchanges over six months (about 1.08% of supply), suggesting reduced near‑term sell pressure and stronger holder conviction. Fewer coins on exchanges historically correlate with dampened forced selling and cleaner upside follow‑through during rebounds.

Levels and Signals to Watch

Focus on confluence and confirmation: - The 365‑day SMA as last‑ditch trend support; sustained closes below would warn of a trend degradation. - The 200‑day SMA and the $101,970–$109,881 band as the primary demand zone. - Exchange net flows: a sudden return of BTC to exchanges would weaken the bullish read. - Market structure: a higher low above the 365‑day SMA plus a reclaim of prior breakdown levels strengthens the long case.

Actionable Game Plan

• Plan the bounce: Consider scaling entries only on confirmation (e.g., daily close back above the 200‑day SMA or prior day’s high). Keep risk tight with stops below the 365‑day SMA or the recent swing low.
• Respect invalidation: If price loses the 365‑day SMA on volume and retests it as resistance, treat it as a breakdown and step aside or hedge.
• Monitor flows: Track exchange balances and net deposits; rising inflows can preface supply overhang and failed rallies.
• Mind derivatives: Elevated funding/premium into resistance can signal crowded longs—fade exuberance; depressed funding into support can favor mean reversion longs.
• Risk discipline: Limit position risk to 0.5%–1.5% per trade; predefine stop/target; avoid averaging down without fresh confirmation.
• Long‑term bias: If you’re investment‑oriented, a measured DCA inside the bull‑support band can be prudent, but only with a multi‑month horizon and clear sizing rules.

Key Risks

Macro catalysts (inflation prints, policy headlines), aggressive long liquidations, or a sharp uptick in exchange inflows can invalidate the bounce. Moving averages can whipsaw in high volatility—wait for closes, not intraday wicks, to confirm signals.

Bottom Line

Bitcoin is testing a historically important support stack while early‑month seasonality hints at base formation; combined with thinner exchange supply, the setup favors a rebound—but only if price holds and reclaims key levels. Trade the confirmation, define your invalidation, and let the market prove the next leg.

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