After a week or so of grinding upward, bitcoin has come back down to earth suddenly with a 9% dump so far today. Will the intense ETF buying take bitcoin back up again, or is this the beginning of a larger correction?
Bitcoin dips are usually bought back up…
Friday’s slide down as low as $65,600 possibly caught many by surprise. On Thursday a pullback had begun, which took the price down 7%, before bitcoin’s buoyancy cancelled out most of those losses. Tuesday was a similar story, with a 6% slump, which was then completely cancelled out by the following day.
We could even go back to Tuesday 5 March, when $BTC moved as much as 14.5% to the downside over the course of the day. This particular dump was then completely bought up 3 days later.
So, it seems to be a story of red candles that head rapidly down, and then a good part of these losses are cancelled out by the end of the day, leaving some relatively long wicks behind that point to probable strong institutional buying.
$BTC breaks down out of its wedge pattern
Source: Coingecko/Trading View
Looking at the very short term price action for $BTC, it can be noted that the price has fallen out of the upward-sloping wedge. Given that this was a very bearish pattern anyway, this was nothing out of the ordinary.
However, the fact that $BTC has now fallen through the previous all-time-high support at $69,000 is more of a cause for concern. The price has currently gathered itself at $67,400. If this can hold, and $BTC is able to reclaim $69,000, very little harm will have been done.
That said, if the price does continue to fall, $63,000 is the next strong area of support that would hopefully hold.
A 20% to 30% correction?
Source: Coingecko/Trading View
Zooming right out on the weekly time frame, a clearer picture is displayed. The large wick that has been left behind, and which topped at just under $74,000, is not a good sign. Therefore, it may just be that this correction does become a deeper one.
Strong support levels at $59,000, and then $51,000 are the possible targets. This would culminate in a 20% and 30% correction respectively. Both or which would be healthy and respectable pullbacks, if indeed either took place.
Selling is a risky option
For those thinking to sell, this is also a risky option. The heavy $BTC buying into the Spot Bitcoin ETFs has not paused or finished. The question has to be asked: “Would it be likely that $BTC would fall 20% to 30% with such upward pressure?”. Trade safely.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Investment Disclaimer6 Underrated Cryptos Primed for a Breakout Between Now and 2025
Crypto Price Analysis 12-2 BITCOIN: BTC, ETHEREUM: ETH, SOLANA: SOL, ALGORAND: ALGO, DOGWIFHAT: WIF, TRON: TRX, BITTENSOR: TAO