The first and largest cryptocurrency by market cap, Bitcoin (BTC) crashed after it reached highs of $19,500 on November 26th. In an extended bearish move, BTC plunged to lows of $16,200 before slightly recovering. The sudden price drop came following Whales depositing BTC to exchanges presumably in a profit-taking agenda near Bitcoin’s 20K all-time highs.
The prior day before BTC crashed, Glassnode analysts indicated that the number of Bitcoin Whales hit a new all-time high. It stated that:
“The number of Bitcoin whales (entities holding at least 1,000 BTC) has reached a new ATH after more than 4 years”
Owing to this, Bitcoin may be poised to experience further pullbacks in the near term from whales’ profit-taking. Historically, a correction may not be out of place as in the previous bull cycles BTC plunged 30%–40% before continuing its rally.
BTC/USD Daily ChartBitcoin is trading presently at $17,064.
The second-largest crypto asset, Ethereum (ETH) wasn’t left out of the bloodbath as it plunged from its multiyear high of $623 to lows beneath $500 before a slight recovery. ETH trades at $503 at the time of writing.
Analysts postulate three likely scenarios for Bitcoin’s near term price. First, it could recover relatively quickly to $18,000. Second, it could continue its plunge to the next major support area at $13,700. Third, it could range, allowing the derivatives market to stabilize.
On the possibility of a bounce, traders say a bounce past the $17,500 to $17,700 resistance range could aid BTC recovery. A pseudonymous trader “Salsa Tekila” stated, “I have the green light to buy $BTC dips if we go back above 17.5k.”
All Exchanges Inflow Mean reaches danger zone. Courtesy: CryptoQuantAnother analyst stated that BTC may bounce like it does during most retracements, but it may be a dead cat bounce. A ”dead cat bounce” is typified by a short-lived price rebound after an extended decline or a bear market, inevitably followed by another leg down. It is quite natural that the downtrends are interrupted by brief rallies, but the tricky thing is that the bounce may look like a reversal at first glance.
On the possibility of a consolidation or a further decline, a crypto analyst Willy Woo noted that consolidation could occur.
A pseudonymous trader “CryptoHustle” stated that BTC consolidation would be beneficial to both Bitcoin and Altcoins. He stated:
“This correction on $BTC at ATH resistance is the best thing that could happen to the trend… 1. The longer we consolidate the more momentum the $20K breakout will have. 2. $BTC consolidating likely means Alts will bounce hard and continue to rally.”
Another trader with the moniker “Beatlorion” said a drop below $15,000 has become a possibility. This may imply that BTC may test the $14,000 zone which should serve as crucial support, as it marked the top of the bull cycle in June 2019.
A trader also said that Bitcoin would likely drop or consolidate for a week before it begins an upward move, this was also corroborated by another set of market analysts who believe that BTC extended decline may hit $13,000 before the bearish momentum wanes and gives way to another massive bullish wave.
To sum it up, no matter the declines, the long-term Bitcoin price outlook remains bullish amid money printing, inflation, and U.S Joe Biden’s presidency.
For the largest Altcoin, the upcoming Ethereum 2.0 launch on December 1st is a bullish one for ETH. Analysts believe ETH may be en route $800 after this widely proclaimed event.
Image Credit: Cryptoquant, Shutterstock
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