Bitcoin falls to where it was yesterday
Over the past two days, the price of Bitcoin has risen 8.5% from $ 13,783 to $ 13,850 on Coinbase. The move came after a month-long uptrend in which BTC rose from around $ 10,200 to $ 13,850.
Now, on high-maturity charts, like the daily chart, for example, the BTC price hovers above a key short-term moving average.
Bitcoin’s recent pattern of following every uptrend with a phase of consolidation makes the ongoing rally sustainable.
The strength of the spot market in the derivatives market also indicates that the uptrend is strong and healthy. A pseudonymous trader known as the “Byzantine General” he told me:
“A higher spot price and higher spot volume (relatively speaking) is considered bullish because it means the rally is based on actual buying instead of escalating by playing derivatives.
The $ 13,873 level is a zone of multi-year resistance
Bitcoin peaked at around $ 13,900 in July 2019 on major exchanges. As Cointelegraph reported, many traders identified the $ 13,875 level as the short-term pivotal resistance zone in part for this reason.
If BTC had continuously risen beyond $ 13,875 without any pullback, it would have caused the rally to overheat massively. In the medium term, this would have increased the likelihood of a deep pullback, or as some chain analysts call it, a “hell candle”.
The BTC drop coincided with the lack of stable coin entries
Ahead of Bitcoin’s short-term correction, CryptoQuant CEO Ki-Young Ju warned that inflows of stable currencies into exchanges were declining.
The influx of stablecoins is an accurate metric to gauge buyer demand, as stablecoins, like Tether, make up a large portion of the cryptocurrency market volume.
According to CoinMarketCap, Tether’s daily volume exceeds $ 59 billion on major exchanges. In terms of daily volume, Tether is the most traded cryptocurrency in the global market. Hours before the BTC crashed, Ju tweeted:
“Fewer people are depositing #stablecoins on exchanges. The purchasing power of BTC weakens in the short term (72h). “
The drop in stable currency inflows may have triggered a sharp pullback in Bitcoin as buyers and sellers were fighting intensely over the past week. Some miners and whales were selling, while new entries continually offset the selling pressure.