Bitcoin price plummeted below $ 16,000 on Saturday morning and reached a local low of around $ 15,750 by 13:00 Moscow time.
Earlier, some analysts have already stated that Bitcoin may wait for a period of consolidation or a rollback, since from the standpoint of technical analysis, after rising from $ 9,800 above $ 16,000, the market looked overheated.
“There has been a major rally, we have seen a good 60% move from the lows since early October, but now some of the overheated market moves are starting to appear. This can be seen in the 3-day and weekly charts. We can enter a period where we should be ready for corrective movements, ”says analyst Michael van de Popp.
There are also opinions that growth should resume, probably in December, which will lead Bitcoin to all-time highs of around $ 20,000. Participants in the Bitcoin options market remain bullish on the long-term prospects of cryptocurrency. This is indicated by the demand for call options outweighing the demand for put options..
As founding partner of Bitazu Capital Mohit Sorout, open interest or the volume of active positions in the bitcoin futures market on November 13 updated all-time highs, which entails risks of increased volatility. Sorout states that “the liquidation feast hasn’t even started yet,” citing bitcoin’s propensity to undergo cascading liquidations, leading to significant price changes in a short amount of time..
At the same time, on the leading crypto derivatives exchanges, the funding rate is about 0.01%, which indicates a balance between short and long marginal positions..
Bitcoin Options Open Interest on Deribit, the largest trading platform for this type of instrument, is also hitting highs.
In China, meanwhile, shares of major tech giants such as Alibaba and JD.com have plummeted by tens of billions of dollars. This happened against the backdrop of a new repressive policy in Beijing, determined to fight monopolies on the Internet. Analysts believe that some of this money may go to bitcoin, which could interest investors in recent bullish dynamics..
On November 12, CEO of the cryptanalytic company CryptoQuant, Ki Yong Joo, drew attention to the increased activity of “whales” associated with the sale of bitcoins. “We can see a correction because the share of whales on the exchanges has exceeded 85%, but I don’t think this will be a massive dump,” he wrote..
One of the analysts looked at Amazon stock charts in the aftermath of the dot-com bubble explosion and found a pattern similar to the current behavior of the bitcoin market. The price of AMZN then fell by 66% and only after that rushed to new highs in the following years.
“The $ AMZN bulls were just a few percent off the all-time high after a horrific multi-year bear market. They shouted: “Bezos will take us to the moon!” Everyone a loss of profit syndrome and entered AMZN when further movement seemed predetermined. I’m not saying that this will happen with Bitcoin, but you shouldn’t lose your vigilance, “he writes..
Similarly, another analyst notes that recent Bitcoin moves resemble its behavior around the highs of $ 20,000. If history repeats itself, Bitcoin could be around $ 14,000..
The intotheblock data indicate that in terms of the distribution of the acquired cryptocurrency, bitcoin does not expect much resistance between $ 16,300 and $ 18,750, while the $ 15,170 level can act as reliable support, since about 860,000 addresses previously purchased 465,000 BTC on it. Analysts expect that the holders of positions at these levels will try to maintain their profitability and will not be interested in further depreciation..
At the same time, one of the analysts states that a large number of sell orders were placed about $ 16,500, and the owners did not move them higher as the price of bitcoin approached this level, which indicates the seriousness of their intentions and the presence of resistance at this level..
“If there is an algorithm that can profitably lower the price by knocking out long positions, the conditions for this may have been organized in such a way as to extract the maximum profit,” he adds..
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