The Bitcoin price action favors sellers. Three days after a moon sling to $19,400, bears struck on Thanksgiving Day.
It has been a downtrend ever since.
At the time of writing (Nov 27), sellers are in the driving seat, pummeling BTC prices lower. Presently, each BTC is trading at around $16,850, down two percent in the last hour and five percent on the last day of trading.
However, buyers hold sway in higher time-frames. Month-to-date, the BTC price is up 26 percent, almost double pre-halving prices of around $9,900.
Bitcoin (BTC) Price Overview
Overly, the Bitcoin price is weak and cratering as traders dump. Made worse by liquidations from trading platforms supporting leverage, sellers are firmly in the driving seat.
The short to medium-term trajectories depend on the reaction at the middle BB and Nov 2020 highs—assuming there is a trend resumption in coming weeks.
A high-volume break below the 20-day moving average may accelerate losses toward June 2019 and Aug 2020 highs of $13,500 and $12,500, respectively.
These levels are reaction points of the Fibonacci retracement tool between the Sep to November 2020 trade range.
Shaping Bitcoin prices will be news events affecting prices in upcoming days.
Bitcoin (BTC) Market Movers
Over $1.5 billion of Bitcoin “longs” were liquidated on Nov 26 according to trackers.
– $1 billion of Open Interest wiped out
– record trading volume: $66 billion on futures and $7 billion on spot
– $900 million longs liquidated
– $1.5 billion longs liquidated on the entire futures market(all coins, all exchanges) pic.twitter.com/8QGOaLMpf6
— Coinalyze (@coinalyzetool) November 27, 2020
Binance traders bore the most brunt when over $650 million were wiped out.
$1.3 billion liquidated across exchanges. Most damage done on Binance, nearly $650m longs got liquidated.
— unfolded. (@cryptounfolded) November 26, 2020
News from China may spark more selloffs. Police seized 194,775 BTC—roughly one percent of the Bitcoin total supply, from the Plus Token Ponzi scheme. It is among other cryptocurrencies bring to a total, a haul of over $4 billion at spot prices.
— The Block (@TheBlock__) November 27, 2020
Despite the market scare, on-chain data is supportive of bulls. While no clear direction is offered, the rising difficulty levels in recent times is a case for ramping up Bitcoin purchases.
@woonomic Bitcoin Difficult Ribbon has been compressed for a while, not seen since pre-bull runs in 2013 and 2016. It shows the acceleration in mining difficulty. Right now is a good time to get $BTC. pic.twitter.com/3aR2fzkF3W
— Mira Christanto (@asiahodl) November 27, 2020
While the hash rate and mining difficulty rise, traders are shifting their assets away from centralized exchanges.
According to GlassNode, a blockchain analytic platform, CEXes hold 2.3 million coins down from just under three million in early 2020.
Bitcoin Price Prediction
Given the wave of liquidation and FUD, the Bitcoin price finds itself at a crossroads. Optimists are confident of a recovery back to $20,000 while pessimists expect further degradation to $14k or worse.
From the daily chart, Nov 26 bear bar confirmed the double bar bear reversal pattern of Nov 24 and 25. The candlestick signaled the end of the bull rally and the correction of the bear divergence pattern between Nov 7 and Nov 24 when the Bitcoin price was rallying without a marked increase in trading volumes (Coinbase data).
$13.5k, or the June 2019 highs, is the immediate support line now that prices are trending below the middle BB. It flashes with the 61.8 percent Fibonacci retracement level and is the upper end of the $1k support zone capped by $12.5k (Aug 25) on the lower side.
Odds are, the journey may not be one-way but through consolidation via a descending channel.
Chart Courtesy of Trading View
Disclosure: Opinions are those of the author and are NOT investment advice. Do your research.
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