Bitcoin (BTC) price hit new all-time highs on various exchanges on November 30, but one record in particular made headlines for another reason.
Data from the Kraken cryptocurrency exchange shows the BTC / USD pair hit its highest price on its order book and then fell to $ 16,600 in seconds.
Kraken BTC price is falling by $ 3,000
The reason for the collapse, which has liquidated a large number of positions and caused considerable pain to many speculators, was probably a so-called “stop-loss trend”.
Stop loss trends are large volume traders who intentionally place large sell orders at a certain price and then target where they believe a large number of stop loss positions are. In this case, The target was $ 16,600, close to the local neighborhood last week.
The result is a cascade of selling pressures that, if successfully valued, will deliver the result very quickly, so that the market will later recover once the process is complete.
Liquidity risk is always a given in stock market trading, and Kraken’s one-minute wick of $ 3,000 aptly shows why traders should be wary of significant prices.
Another explanation, or possibly one that contributed to the event, was that investors chose to exit near $ 20,000 to avoid the cost of a sudden reversal of resistance.
Bollinger warns of “classic roof formation”
“Okay, time to watch out, $ BTCUSD. This is a classic ceiling configuration.”, he warned John Bollinger, Creator of the Bollinger Bands volatility indicator.
“There’s no confirmation yet and setup could easily be overrun, but smart traders should wash their glasses.”
When asked by a Twitter user if this was a local top or if the price of Bitcoin would fall from here, he replied, “At the moment a potential local top …”
Beyond Kraken. Bitstamp also hit its own all-time high at $ 19,869. The BTC / USD pair fell to $ 19,000, a level the pair regained a few hours ago.
“For those who are optimistic about #Bitcoin, today is the day you have been waiting for,” he summarized Binance Meanwhile.