Bitcoin’s price dropped sharply by more than 3% in less than an hour after rising to USD 13,350, but its high timeframe charts are still very optimistic.
It’s likely that three factors triggered a rapid decline in the price of Bitcoin (BTC) on October 25. First, traders point to the area of USD 13,300 to USD 13,500 as a major resistance range. Second, the futures and options markets are neutralizing. Thirdly, weekend trading apparently amplifies volatility.
The USD 13,300-USD 13,500 range is a key resistance area for Bitcoin in the short term
Before the sudden drop in prices occurred, BTC shot up from USD 13,127 to USD 13,350. The dominant cryptomone currency quickly recovered to an area of interest to sellers as more miners moved BTC into the exchanges.
Over the past week, ByteTree data shows that Bitcoin miners have been selling more than they mine.
Bitcoin’s whale clusters point to 3 key levels for the BTC price spike to continue
BTC possibly experienced a strong correction as it moved into a key resistance range, which sellers defended aggressively.
Some technical analysts anticipated that the price of Bitcoin would rise to around USD 13,500 before seeing a retracement. Before the volatile price action occurred, crypto trader Cantering Clark said:
“Upward debt/leveraged long exposure will prevail the higher it goes, but right now futures are consistently spread from spot and the friction is obvious. You may get a pop-up plus 13.5-13.8 before a good-sized withdrawal”.
Bitcoin 2-hour price chart with key support levels Font: TradingView, Michael van de Poppe
The futures and options markets are neutralizing
After a week-long rally, the futures market began to show signs of overheating. Although BTC’s funding rate remained at an average level of 0.01%, the alternative crypt currencies showed high funding rates.
JPMorgan is now betting on Bitcoin citing its “long-term upside potential”.
The general market for kryptonie futures needed a reversal to restore or cool the funding rates of the major kryptonies. The Bitcoin Fear and Greed Index also shows “extreme greed” in the market, making a healthy reversal a positive trend for BTC.