The price of Bitcoin fell sharply by over 3% in less than an hour, after rising to $13,350, but its long-term charts remain highly optimistic.
3 reasons for a 3% drop in Bitcoin in 1 hour and its recoveryMARKET
Three factors probably triggered a rapid decline in the price of Bitcoin (BTC) on 25 October. First, traders identify the US$13,300 to US$13,500 area as a large resistance band. Second, the futures and options markets are neutralizing. Third, weekend trading is apparently adding to volatility.
Resistance area important for Bitcoin in the short Crypto Investor review term
Before the sudden drop in prices occurred, the BTC soared from US$13,127 to US$13,350. The dominant cryptomeda rose rapidly to an area of interest to sellers as more miners transferred BTC to the exchanges.
Over the past week, ByteTree data shows that Bitcoin miners have sold more than mining capacity.
BTC possibly saw a sharp correction, as it rose to a key resistance range that sellers aggressively defended.
Some technical analysts predicted that the price of Bitcoin would rise to around $13,500 before seeing a downturn. Before the volatile price action took place, cryptomaniac broker Cantering Clark said:
„Leveraged high/long exposure loans will be more prevalent the higher this is, but now futures are consistently extended from the spot and friction is obvious. Perhaps I can get another 13.5-13.8 rally before a good-sized setback. ”
Bitcoin 2 hour price chart with main support levels. Source: TradingView, Michael van de Poppe
Futures and options markets remain neutral
After a week’s high, the future market began to show signs of overheating. While the BTC funding rate remained at an average level of 0.01%, alternative cryptomaps showed high funding rates.
The future market for cryptomorphs in general needed to retreat in order to redefine or cool financing rates for the major cryptomorphs. The Bitcoin Fear and Greed Index is also showing „extreme greed“ in the market, which makes a healthy retreat a positive trend for BTC.
Weekend usually brings volatility
Meanwhile, the options market also faces a $750 million maturity in about six days, which can trigger volatility.
Over the weekend, especially on Sunday, volatility in Bitcoin and the cryptomino market tends to increase.
There are many potential factors that can cause volatile price movements. Two main factors are the reduction in volume over the weekend and the anticipation of weekly candlelight closings on Sunday.
If the price of Bitcoin goes above $12,000 in the next 15 hours, this will mark the first weekly candle closing above $12,000 since January 2018.
Bitcoin weekly price list. Source: TradingView.com
As such, while the BTC continues to see high volatility, the optimism surrounding its high term registration charts is driving overall market sentiment.
A popular technical analyst known as „Squeeze“ stressed that Bitcoin’s macro view remains optimistic, especially as the BTC’s foreign exchange balances continue to fall, reducing available supply. He said:
„Bitcoin’s macro view remains optimistic, as $BTC exchange balances have continued to fall sharply since March (whales are still not selling, even at US$13,000). There are also about 136k BTC currently committed to the WBTC/RenBTC.“
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