After a sharp fall in Bitcoin (BTC), cryptocurrency traders are scratching their heads. This has triggered a market-wide sale-off that has almost every token in the top 200 flashing red on November 16.
Cointelegraph Markets Pro and TradingView data show that Bitcoin prices dropped to $58,609, before buyers bought the Bitcoins and brought them back up to $60,000.
BTC/USDT 4-hour chart. TradingView
This is a look at what traders and analysts have to say about the recent downturn and whether it is a shakeout, or a sign of darker clouds.
BTC is looking for support and resistance levels
Options trader John Wick, a pseudonymous Twitter user, provided insight into BTC’s daily price movement and posted the following chart. It highlights some key support and resistance areas.
BTC/USD 1-day chart. Source: Twitter
Wick stated that Bitcoin is still in the resistance zone surrounding its new all time high. He also mentioned the possibility that Bitcoin could drop to $58,000 to $59,000.500, similar to the move seen on Nov. 15.
“We are testing the range low resistance zone. It may be possible to test the support zone if we break it at the close.
Similar observations were made in the same way by Market Analyst and pseudonymous Twitter User ‘Rekt Cap’, who posted the following tweet. He zoomed in and looked at BTC’s price action on the monthly chart.
The analyst mentioned that the Nov. 16 price action was a retesting of the monthly resistance/support level at $58,700. If the price closes above $61,000, it will be possible to make a bullish case in the coming weeks.
Still, $54,000 is possible
Michael van de Poppe (market analyst, Cointelegraph contributor) provided a balanced view of the most recent price action. He posted the following chart showing a possible BTC price trajectory for the week.
BTC/USD 1-hour chart. Source: Twitter
van de Poppe said,
“So far, Bitcoin has been a success. While we are grateful for the support, we still have to address some critical areas. This has not happened yet. Let’s start with that first. It is crucial to have $63,000. There is no breakout that will lead to further downward momentum.
Van de Poppe’s chart shows that if the downward momentum continues the price of Bitcoin could fall to $54,000.
Related: Bitcoin stage a ‘picture perfect rebound’ at $58.5K, as crypto liquidations surpass $875M
Fractal patterns indicate a near price rally
Crypto Twitter analyst Allen Au posted these side-by-side charts for Bitcoin from 2013 to 2021 as a response to concerns that $69,000 was the peak of the cycle.
BTC/USD 1-day charts starting in 2013, 2017, and 2021 Source: Twitter
Analysts believe that the current downturn was not the top of the cycle, but rather the Wave 6 movement seen in previous cycles. BTC could soon be on Wave 7 if it reaches its lowest point.
If the above-described wave sequence is followed, then Wave 5 could reach $69,000 and Wave 6 could drop to $58,600. A cycle peak of $190,000 to $260,000 will occur sometime between December 2021 and December 2021.
The total cryptocurrency market is now worth $2.651 trillion, and Bitcoin’s dominance rate of 43.2%.
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