Bitcoin's uptrend in 2020 has once again expanded further, allowing the cryptocurrency to set an annual new high today earlier today at $ 9,800 before hitting strong resistance.
Despite the positive moves of this rally, it is important to note that BTC has been declined at the range highs, signaling that the uptrend may soon stop before moving on to another downtrend.
The analyst believes that the downtrend due to rejection at high levels will lead BTC to $ 7,500.
Bitcoin's momentum is hampered after hitting a high
Bitcoin is trading up above the $ 9,600 area, marking a noticeable increase from the daily low of $ 9,200 and down slightly from the intraday high of over $ 9,800.
The positive move this morning took place after several days of downtrend, pushing Bitcoin from as high as $ 9,650 to a low of $ 9,100 and it is time for the bull to begin to come back to absorb the strong selling pressure, resulting in an upward trend today. now on.
While the move shows an extremely positive trend, it's worth noting that BTC was rejected at a high of the range of around $ 9,800, signaling this could be a local peak.
C2M analyst noted the range highs on the chart, suggesting that they were set in November last year.
Reaching range high as we speak. pic.twitter.com/9lmr3gkuOH
- C2M (@ C2M_Killmex) February 5, 2020
Will BTC plummet to $ 7,500 before finding support?
Regarding how far the potential downtrend can go, Teddy thinks it will decline until it hits the lower boundary of the wide trading range at around $ 7,500.
Looking at the same range on a daily time frame price:
2. Broke first resistance
3. Was stopped with surgical prevision on second resistance
Above sitting party time, strong rejection and we are testing lower side of range again pic.twitter.com/AoyCC5u3hV
- TEDDY (₿) (@TeddyCleps) February 5, 2020
“Observe the same scope on daily time frame: 1. Pump 2. Breaking the first resistance level 3. Stops after rising above the second resistance level. Above this level is a positive signal, the price was strongly rejected and is testing below the range again. ”
The only way to avoid this downtrend is to push the price above $ 9,800.
In the near term, it is highly likely that the $ 9,500 to $ 10,000 area will continue to act as a strong barrier. Thus, today's decline above $ 9,800 seems to cause trouble for the bulls in the coming days.
The open position and high sponsorship ratio indicate that BTC is about to adjust
Aside from the price being firmly held by the resistance, there are a number of other factors that can cause trouble for Bitcoin.
For example, the open position BTC (OI) on the popular trading platform BitMEX has surpassed $ 1 billion. Historically, this index has inversely correlated with the state of the leading cryptocurrency, causing a strong sell-off.
Something simply to keep an eye on
Generally speaking we’ve seen Bitcoin dumping when OI crossed 1 billion $ on BitMex.
Doesn't mean mean it has to dump but something always something worth keeping an eye on.
- TraderSmokey (@SmokeyXBT) January 28, 2020
“Overall, Bitcoin was sold off when OI exceeded $ 1 billion on BitMex. Does not mean it should dump but always something to keep an eye on. ”
Moreover, the BTC sponsorship ratio on BitMEX is also very positive and quite high at this time, meaning that long positions are currently paying for short positions.
Although this is not a clear discount indicator, it shows that the bulls started closing long positions in the hope of avoiding interest payments. As such, BTC can significantly reduce the current buying pressure if the price continues to stagnate below $ 10,000.
BTC price today | Source: Coinmarketcap
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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