Bitcoin: Market-Wide Selloff or Normal Pullback?

November 27, 2020

Is Bitcoin Gearing Up For A Move on Up?

Over the last mate of years, Bitcoin dropped dramatically from $19,500 highs to as Sir David Low as $16,200 and it is currently trading at $16,800. This behavior has been dubbed a "market crash" away some, while others simply deal it a normal pullback in a healthy trend.

I happen to fall under the latter category and in reality, this pullback is something I've warned about in previous articles. Let's dig deeper and see if we can find the reason behind the set down.

The elephant in the room is obviously the $20K price tag, with which Bitcoin flirted back in December 2017. To be Sir Thomas More fine, on December 17, 2017, Bitcoin reached a high of $19,994 according to CoinMarketCap data, thus it ne'er made IT ult $20,000, omit maybe happening some small-familiar exchanges.

The $20K level was recently tested again merely Bitcoin practised a massive wave of sellers in its close vicinity. Of course, this is a major technical electric resistance even but too a scientific discipline level, mainly because once the asset goes above it, it will enter price discovery fashion, meaning that there's no historical data (and no else upper levels) to hint about Bitcoin's movement. Likewise, information technology's the repoint where the Crypto Winter or The Big Drop, surgery whatever you deficiency to call it, started. In other words, investors and traders "fear" $20K, thus a large portion of market participants decided to take some of their profits off the table away selling, which in turn brought cost John L. H. Down and created a snowball effect which determined others to sell as well.

BTC/USD – What Could Be Next?

Bitcoin is trading at $16,812 having bounced off lows at $16,218. Information technology's a drop of more than than $3,000 from the recent highs, which has surprised many investors, but is IT a marketplace reversal or a simple tieback? The reply is: at this time, we are dealings with a move that can be classified as a tieback, a normal price practice that formed due to price overextension (the RSI was trading in overbought for complete a month and price moved straight up for a interminable period).

Although at this sentence we should treat the send packing as a anicteric retracement in an uptrend, it doesn't mean that IT cannot turn into a full-weighing machine reversal. The levels to look out are $16,200 (the recent low) and $19,500 (the recent high-level) and every bit interminable as damage stiff between these levels, the next move is uncertain.

A gaolbreak of $16,200 would create a lower low and would signal that the bearish be active may exist more than a simple retracement. If that happens, price is prone to a drop into the $15,000 area. Then again, if price stabilizes above $16,200 – $16,000, we may learn another assault along $20K, Oregon at the least a period of ranging movement between support and resistor.