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The price of Bitcoin (BTC) dropped 3% in less than three hours as the US stock market collapsed. Following the pullback, most traders are neutral or slightly bearish on the short-term trend of BTC.
Traders and chain analysts are now identifying $ 12,500 and $ 11,973 as the two levels to watch for the continuation of the Bitcoin rally.
Because $ 12.5K and $ 11.9K are crucial for the current Bitcoin rally
The price of Bitcoin fell sharply over the course of the day due to the confluence of major macro factors.
JPMorgan said the re-election of US President Donald Trump would be the most favorable outcome for the stock market. Investment bank analysts wrote:
“We see a Trump ‘orderly’ win as the most favorable outcome for equities.”
Given that expectations of a democratic sweep remain relatively high, it may have rocked the markets.
In addition to election risk, the United States has seen a new spike in daily COVID-19 cases. Alongside the fear surrounding the pandemic, House Speaker Nancy Pelosi reportedly the Trump administration rejects the stimulus package.
The Dow Jones Industrial Average (DJIA) plunged nearly 1,000 points in a single session. With the collapse of the US stock market, BTC collapsed, dropping around 3.4% in several hours.
Despite this, technical analysts believe it is difficult to conclude that the dominant cryptocurrency will see a sustained pullback.
For now, the $ 12,500 support level remains a critical area for buyers to defend for three reasons.
First, it’s close to the 10-day moving average on Bitcoin’s daily chart. Second, it is the high of the previous peak on August 17th, making it a key support level. Third, it has large clusters of whales, which makes it an area of interest for high net worth investors.
As long as BTC defends $ 12,500, the chances of a bullish trend remain high. While Bitcoin can stay above $ 11,973 despite the rapid pullback, the near-term outlook remains particularly bright.
Researchers from Whalemap, which tracks Bitcoin whale activity, have identified $ 11,973 as the level to support the bullish trend. They She said:
“$ 11,973 is the level $ btc must hold for the uptrend to continue.”
A new test of support could reinforce BTC’s current bullish trend
Even if BTC tests the low support level of $ 12,500, traders believe this could create a healthier uptrend for BTC.
The price of Bitcoin has risen 15% since October 17 with a near-zero decline, demonstrating strong momentum. Following such a large rally, a short-term consolidation phase or pullback could be beneficial for BTC. Cryptocurrency trader Scott Melker She said:
“I have orders from $ 12,100 to $ 12,500 in case we see a retracement on the daily TD9. As I said, ideally I’d like to see a healthy retracement to pick up more steam for the next push up. It would be better to do a deeper retrace and then traced below. “
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