Why Bitcoin Price Has Only Dropped 6% After $ 18,500 Rejected

Bitcoin (BTC) price fell sharply after nearing $ 18,500 on Binance and Coinbase. The decline came when large sell orders were noted on both spot and futures exchanges.

BTC / USD 15-minute chart. Source: TradingView.com

As Cointelegraph previously reported, Traders expected a decline as the price of BTC neared the $ 18,000-19,000 resistance zone. When it first tested the area in nearly three years, the market saw a strong response.

Bitcoin confirms that $ 18,500 is an important short-term resistance zone

There are two main reasons why Bitcoin saw a rapid decline near $ 18,500and this resulted in other cryptocurrencies like Ether (ETH) correcting even more.

Why Bitcoin Price Has Only Dropped 6% After $ 18,500 Rejected
Why Bitcoin Price Has Only Dropped 6% After $ 18,500 Rejected

First, The $ 18,500 level remains the highest level of resistance ahead of a new all-time high above $ 20,000. It is therefore a key area of ​​interest for sellers to defend themselves, as exceeding $ 18,500 would increase the chances of a wider raise..

Secondly, An overwhelming majority of Bitcoin addresses are profitable as BTC tests a significant area of ​​resistance. According to IntoTheBlock, 99% of BTC addresses are in a winning state. This increases the likelihood of a profit-related withdrawal.

There is a high chance it will be aggressively bought if the price falls based on BTC’s rebound in the past two hours. After initially falling to $ 17,214 on Binance, Bitcoin immediately surged above $ 17,600.

Bitcoin’s hourly chart shows that the 20-day moving average (MA) is at $ 17,586. So, If BTC stays comfortably above this level, the likelihood of a longer rally increases.

Dan Tapiero, co-founder of 10T Holdings, was confident about the medium-term outlook for Bitcoin. Said The “big boys” or the smart money will likely buy when the price drops.

The weekly bitcoin price chart. Source: Bloomberg, Dan Tapiero

John Wick, a popular bitcoin trader, echoed that sentiment. Wick said that Bitcoin is seeing some gains, but it remains uncertain how long the bulls will be able to keep the pressure going. Said What:

“Profit-taking has already started.”

What happens next

A trader with the pseudonym “Bitcoin Jack” said that The dominant cryptocurrency is reaching the “end” of its short-term cycle. Bitcoin has some edge after the last pull-out. However, this suggests that more buyers may be trapped, which could make another decline likely.

Given that the Bitcoin MAs remained strong after the crash, The chances of recovery are greater than a decrease.

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