Bitcoin (BTC) has fallen nearly $ 18,500 on Binance and Coinbase. The decline occurred when large sales orders were discovered in both spot and futures exchanges.
As Cointelegraph previously reported, traders expected a pullback as the BTC price approached the $ 18,000 resistance zone to $ 19,000. After the region’s first test in almost three years, the market saw a strong reaction.
Bitcoin confirms $ 18,500 key range for short-term resistance
There are two main reasons why Bitcoin is rapidly declining by around $ 18,500, making other cryptocurrencies such as Ether (ETH) more difficult.
First, the $ 18,500 level remains the largest resistance level ahead of a new full-time high above $ 20,000. Therefore, this is one of the main areas that sellers are interested in protecting, as a break of $ 18,500 will increase the chances of a wider meeting.
Second, the vast majority of Bitcoin titles are profitable because Bitcoin is testing an important area of resistance. According to IntoTheBlock, 99% of BTC addresses are now in profit. This increases the probability that profits will decrease.
Based on the recovery in BTC over the last two hours, there is a high probability that the traps will be actively purchased. After an initial drop to $ 17,214 on Binance, Bitcoin immediately spiked above $ 17,600.
The hourly chart in Bitcoin shows that the 20-day moving average hovers at $ 17,586. Thus, if the BTC stays comfortably above this level, the potential for long recovery increases.
Dan Tabiro, co-founder of 10T Holdings, has expressed confidence in Bitcoin’s medium term. He said that the big or smart money will probably buy the falls. Referring to Bitcoin’s weekly chart, he wrote:
You will rarely see a chart like this in life. Bitcoin inevitably breaks rally. The third wave casts a shadow over the 2017 movement and will continue for several years. Real Price Basics Vs. Specific Retail Stream / ico ’17. Older boys will now buy sauces. ”
Weekly Bitcoin chart. Source: Bloomberg, Dan Tabiro
This view is shared by John Wake, a renowned bitcoin trader. Vic said that Bitcoin sees some profit, but it is still unclear how long the bears will be able to withstand the pressure. He said:
“BTC profits are starting now. Let’s see how far the bears can push this down before we buy it again.”
what happened after that?
A trader under a pseudonym known as Bitcoin Jack said that the dominant cryptocurrency is nearing the end of its short-term cycle. Bitcoin has some bullish potential after the recent withdrawal, but it indicates that more long positions or buyers may be caught, which could trigger another decline.
The dealer explained:
“I think we’re in the final. Some of the potential for the upside is left that potentially squeezes the previously shorter objects and captures more long potentials. Clap then, clap in the trap. We eat shawarma for dinner.”
While bitcoin’s moving average continues to hold after the decline, the chances of recovery are higher than a larger decline.