Bitcoin (BTC) plummeted after it crossed $ 11,500 on Binance between October 14-15. Within two hours, it was down to $ 11,280, indicating a drop of 2.3%. After the fall, analysts are forecasting another small dip in the short term.
Three factors most likely to fail are the BitMEX selling, high levels of resistance, and withdrawal from the stock market.
Bitcoin declined once the Dow fell
On October 14, the Dow Jones Industrial Average (DJIA) is down 0.58% after rising slightly.
As the trend in the US stock market began to reverse, Bitcoin posted a sharp decline. In 15 minutes, BTC was down 1.15% from $ 11,518 to $ 11,370.
According to Skew, the correlation between Bitcoin and the S&P 500 has increased in recent weeks. In contrast, the true correlation between Bitcoin and gold has decreased dramatically over the past three weeks.
The data indicates that Bitcoin is currently seen more as a risky asset than a safe one. Whether this will make BTC’s weakness weaken amid the stock market downturn in the fourth quarter remains to be seen after the strong third quarter.
BitMEX for sale
Some network analysts have found increased selling pressure from BitMEX with large short positions in the market. Before the initial decline from $ 11,540 to $ 11,280, several multi-million dollar short-term contracts appeared on BitMEX.
As a result, BitMEX’s open interest increased from $ 397 million to $ 414 million due to lower prices.
The $ 11,500 level became a resistance area
The repeated rejection of the $ 11,500 area turned it into a technical resistance level in the short term.
After BTC struggled to break above $ 11,500, traders began to consider the possibility of a drop below $ 10900.
Michael Van de Pope, a full-time trader on the Amsterdam Stock Exchange, said the $ 11,300 support area remains the most critical level. Bobby said the drop below could send BTC up to $ 10,600, explaining:
“Opinion remains the same. By staying here, the market may continue to go up. If I lose this position, I’ll bet $ 10,900 and $ 10,600 next time.”
However, the long-term outlook for Bitcoin remains positive, supported by the upbeat performance of the network. Glassnode researchers found that 14% of BTC is stored in storage addresses.
The growing number of investors owning Bitcoin, which is likely to be a long-term investment strategy, is the main catalyst for Bitcoin by 2021. The researchers stated:
“Bitcoin accumulation has been on a continuous upward trend for several months. $ 2.6 million Bitcoin (14% of supply) is currently in cumulative addresses. Accumulation addresses are defined as addresses that contain at least two incoming messages and have never used BTC.”
The formation of repeated deviations from the same resistance level depicts a weak short-term trend. But in the coming months, several data along the chain point to the possibility of a strong market recovery.