Bitcoin (BTC) price fell below $ 13,000 on October 28, shortly after hitting $ 13,850 at the high of the day.. Despite the 7% drop in 11 hours, market sentiment remains positive for three main reasons.
First, Bitcoin is still where it was on October 27th, 24 hours ago. Secondly, BTC rose to $ 13,850just below a multiyear resistance area of $ 13,873. In third place A market-wide decline was expected due to declining stable coin inflows on the stock exchanges.
Bitcoin is falling where it was yesterday
In the past two days Bitcoin price rose 8.5% from $ 13,783 to $ 13,850 on Coinbase. The move came after a month-long uptrend in which BTC rose from around $ 10,200 to $ 13,850.
Well, on the high-time frame charts, such as the daily chart, The price of BTC is above a major short-term moving average.
The most recent Bitcoin pattern, which follows every uptrend with a consolidation phase, makes the ongoing rally sustainable.
The strength of the spot market versus the crypto derivatives market also shows that the uptrend is strong and healthy. A dealer known as “Byzantine General” He said::
“A higher spot price and a higher spot volume (in relative terms) are considered bullish, as the rally is based more on actual purchases than on degenerate games in derivatives.”
The $ 13,873 level is a perennial area of resistance
Bitcoin hit a high of around $ 13,900 on major exchanges in July 2019. Partly for this reason, as Cointelegraph reported, many traders pointed to the $ 13,875 level as the near-term fundamental resistance area.
If BTC had risen continuously above $ 13,875 without retracement, it would have caused the rally to overheat massively.. In the medium term, this would have increased the likelihood of a deep retreat or, as some chain analysts call it, a “candle from hell”.
The drop in BTC prices coincided with the lack of stable coins
Before the short-term correction of Bitcoin, the CEO of CryptoQuant, Ki-Young Juwarned that The flow of stable coins to the exchanges declined.
The influx of stable coins is an accurate metric for measuring buyer demand as stable coins like tether make up a large chunk of the cryptocurrency market volume.
According to CoinMarketCap Tether’s daily volume exceeds $ 59 billion on major exchanges. Simply in terms of daily volume, Tether is the most widely used cryptocurrency on the world market. A few hours before the BTC crash, Ju tweeted::
“Fewer people are depositing #stablecoins on cryptocurrency exchanges. The purchasing power of BTC is weakening in the short term (72h) ”.
The decline in stablecoin flow could have pulled Bitcoin back sharply as buyers and sellers fought intensely over the past week. Some miners and whales sold while the new tickets steadily offset the selling pressure.