Bitcoin suffered a price crash after rapidly approaching the benchmark of $18,500 on both Coinbase and Binance. This price crash took place as several large sell orders were found on both future and spot exchanges. As has been reported by Cointelegraph, most traders had been anticipating a price crash in Bitcoin as it neared the $18,000 mark resistance zone. This was the first reaction the market saw, after its first retest in this resistance area.
Bitcoin confirms $18,500 as a key near-term resistance area
There have been two main reasons highlighted why Bitcoin saw a price crash near the $18,500 mark- something that has led to other cryptocurrencies like Ether to start correcting even harder. Firstly, the level of $18,500 has been the biggest resistance level of all time- before it reaches an all-time high of around $20,000. Therefore, this is an area that traders and sellers want to defend- for the breach of such a mark would bring out chances of broader rallies.
Secondly, quite a large number of Bitcoin addresses have been seen as profitable as Bitcoin tests are quite an important resistance area. The IntoTheBlock mentions that 99% of all Bitcoin addresses have now been settled into a complete state of profit. And it goes without saying, this does increase the probability of a pullback that has been induced by profit-taking. As it goes, based on the recovery by Bitcoin in the last two hours, there is quite a good chance that most of the dips are going to be bought pretty aggressively. After the first drop to around $17,214 on Binance, Bitcoin had quite a good recovery above $17,600.
The Bitcoin hourly chart shows that the moving average for 20-days has been hovering at around $17,586. It has been mentioned that if Bitcoin is able to remain at this level comfortably, it would have better chances of recovery. The co-founder of 10T Holdings, Dan Tapiero, has already expressed his faith in the medium-term outlook of Bitcoin. He mentioned that the smart money, or the ‘big boys’ would probably go in for the kill and buy the dips.
What happens next after the Bitcoin price crash?
‘Bitcoin Jack’, a pseudonymous trader has mentioned that Bitcoin is slowly reaching the ultimate position of its short-term cycle. But there is still some upside left for the company after this pullback- yet he notes that there could be more buyers who would get trapped- making another drop pretty likely. Nonetheless, he believes that the hourly moving averages of Bitcoin since the price crash has been quite respectable- so there’s a good chance that the recovery is much higher than another large drop.
Although Bitcoin is looking for some profit, it is not certain how long it would be able to maintain the pressure.