On October 15, the price of Bitcoin dropped to $6,150, dangerously moving closer to its $6,000 support level which it has well maintained since early August.
Due to its low volume, Bitcoin struggled to demonstrate momentum in the mid $6,000 region, failing to hold $6,550, a level it had held fairly well throughout the past two months.
Over the past 24 hours, the price of Bitcoin surged from $6,150 to $6,750, coming close to breaking out of the $6,800 resistance level that could have opened an opportunity for BTC to break into the $7,000 region.
Although BTC has fallen to $6,400 since then, traders are positive the drop to $6,150 was the final shakeout BTC needed to see before a new rally.
After a month-long lay off, well recognized technical analyst and cryptocurrency trader AngeloBTC, who possess hundreds of thousands of followers on social media platforms, stated that BTC experienced its last dip ever, alluding to the fact that the weekly chart of BTC is demonstrating a clear bottom-like trend.
Shorts on Bitcoin achieved an all-time high on exchanges including Bitfinex and BitMEX, which led to the liquidation of many short contracts in the past 12 hours. The short squeeze of BTC contributed to the sudden increase in the price of BTC, allowing it to recover from the low $6,000 region.
The volume of BTC has also demonstrated a promising improvement since last week, growing from $3 billion to $7 billion, by more than two-fold. The daily trading volume of the dominant cryptocurrency is said to be $7 billion, due to the sell-off of tokens against Bitcoin and Ethereum, but the actual volume of BTC is around $5 billion.
On CoinCap.io, ShapeShift’s official cryptocurrency market data platform, the volume of Bitcoin rose from $2 billion to $5.6 billion, by more than two times in the span of 12 hours.
Still, a $2 billion increase in volume within a 24-hour period is an optimistic indicator for a short-term rally, especially for an asset like Bitcoin that has stagnated throughout the past three months triggered by a decline in trading activity across major cryptocurrency exchanges.
Cryptocurrency trader Crypto Rand stated:
“Bitcoin printing the biggest volume candle since April and holding over the main downtrend resistance. Looking great. PS: I chart BTC using an index combination of Coinbase, Bitstamp, Bitfinex, Binance and Kraken in order to minimize the data deviation.”
A major resistance of Bitcoin at $6,800 is yet to be broken. BTC experienced a shakeout on October 15, which the majority of traders in the market consider to be the final shakeout of BTC in 2018.
The unexpected increase in the volume of BTC could push the asset to demonstrate solid gains in the short-term, especially if positive developments in the cryptocurrency sector such as Fidelity’s integration of BTC affects the cryptocurrency exchange market.
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Last modified: June 14, 2020 11:04 AM UTC