Bitcoin (BTC) price had a tremendous month as the price jumped from $ 10,500 to $ 13,800. However, in the past few days, the momentum has slowed amid growing coronavirus fears. Bitcoin price fell from $ 13,800 to $ 12,900 on October 28, making the recent breakout a fake.
In addition to a correction in the cryptocurrency markets, the equity and commodity markets also showed weakness. With the SP down 4% on Wednesday, silver also corrected 6%. The only asset that did relatively well was the US dollar currency index (DXY). In other words, investors are flying into the USD again for security reasons.
The area of $ 13,500 to $ 14,000 confirms the resistance for Bitcoin
The 2 day chart shows obvious resistance in the $ 13,500-14,000 area as a rejection is observed in this area. The $ 13,500-14,000 area is the final major hurdle before a new potential all-time high can be reached. Many investors and traders consider this area to be crucial.
The table also shows a clear support zone that can be tested in the next period.. This zone is marked between $ 11,600 and $ 12,200. With this area held as a support, a new range-bound construction can be set up to begin a healthy period of accumulation.
DXY jumps up and the price of BTC falls
As fears about possible quarantines return across Europe, the escape to safety begins too.
The first wave came in March 2020 when the migration towards the US dollar was seen as a market collapse. As a result, the US dollar currency index (DXY) bottomed and rebounded from 92.50. It is currently close to 94 points that caused the DXY Index’s recent rebound to cause weakness in other markets.
Bitcoin has pulled back a lot in the past few days, but even silver showed a 6% correction in just one day.
As the data shows, the correlation between Bitcoin and the DXY index has reversed since the March crash. This is also similar to the movements of gold.
From this data, however, it can be deduced that the likelihood of further corrections for Bitcoin increases in light of weak old markets and social unrest related to possible locks.
A correction would not necessarily be detrimental to the Bitcoin market at the moment, as it could lead to further accumulation.
Most investors definitely want to see a straight line toward $ 200,000, but that just doesn’t happen.. At best, Bitcoin is at the beginning of a new cycle through which the boring part of the pages repeats itself over and over again. Once all levels have been tested, parabolic movements can occur in pricing.
The cops should claim $ 13,300
A well-known concept is a break in the previous liquidity resistance. After that, the range drops immediately. This is known as counterfeiting and is often seen in the liquidity markets.
As the graph shows, a clear resistance zone is being established at $ 13,250-13,400 that needs to be broken to maintain further upward momentum. If the zone of resistance cannot be cleared, a disadvantage is more likely to occur.
Levels below current prices are between $ 12,700 and $ 12,850 and between $ 11,600 and $ 11,800 as higher time zones to look for possible support.
The latest “candle from hell” scenario is only expected if the support zone between $ 12,700 and $ 12,850 is lost. However, such a decline would justify sell-offs in all cryptocurrency markets, and altcoins would suffer the greatest losses from such a correction in Bitcoin.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement involves risk. You should do your own research when making a decision.