Bitcoin
Is Bitcoin Heading for a Historic Trap?
As trading approaches the weekend, the rally is turning in favor of the bears as the star token has come under enormous selling pressure. The price, which was about to surpass one of the important resistances at $71,500, fell sharply near the main support zone between $68,096 and $68,581. While market participants speculate for a strong recovery to regain lost levels, the trade setup suggests that the BTC Price it could head towards lower levels below the support zone.
Currently, the total open interest in Bitcoin is still around US$20 billion. These levels are similar to the previous cycle when it topped, which suggests the price is close to the same level. Therefore, if the price rises, open interest may also rise. This scenario remains open as the token continues to hold above the crucial support zone as traders have acquired a huge amount of Bitcoin in a certain range.
A popular analyst, ALL, shared some interesting information about 1.97 million addresses purchasing almost 964,000 BTC, which is anchored between support levels between $69,380 and $67,350. Therefore, the analyst suggests that Bitcoin is required to maintain and sustain these levels to trigger strong upward momentum. Regardless of the growing bearish pressures, the price continues to remain within an ascending parallel channel, substantiating the bullish claim.
The Bollinger Bands are contracting, while the DMI has also started to contract, which suggests that the price is experiencing a major volatility compression. This could result in huge price action, while the direction could be highly dependent on the induced volume. The current trade setup suggests that bears have gained enormous momentum due to the possibility of a bearish pullback.
Therefore, Bitcoin price, which is trying to find a base in the mid-range of the bands, could enter the main support zone and if the bulls fail to show their strength, a sharp drop to $66,800 could be imminent.