[ad_1]
Source: Wit Olszweski – Shutterstock
- Bitcoin’s price rate plummeted from $ 19,450 to $ 17,200 in just a few hours and can currently stabilize at $ 17,950.
- Analysts say long-term on-chain indicators remain bullish and BTC can test $ 20,000 again.
Bitcoin’s price reached a new year high of $ 19,450 and was close to its previous all-time high of over $ 20,000. Within hours, however, Bitcoin showed a strong correction, with the price briefly dropping to $ 17,200. At the time of writing, BTC was able to stabilize at $ 17,950. Market capitalization dropped to $ 332.19 billion.
Many analysts have warned of a correction, including Bitcoin bull Brian Kelly and trader Tone Vays. In a new podcast yesterday, Vays predicted a correction of up to $ 14,000. In addition, some metrics also indicate a price drop, although this is likely to be small. The “Crypto Fear and Greed Index” has been at record highs throughout November, indicating that investors are too “greedy”.
Source: Alternative.me
Additionally, the correction was accompanied by an increase in large-volume BTC transactions on various exchanges, so that some whales likely wanted to take their profits just before the $ 20,000 mark and thus put pressure on the price. Ki Young Ju, founder of the on-chain analytics service CryptoQuant, said on Twitter that more and more whales are sending BTC to exchanges, but that long-term on-chain indicators remain bullish:
The average influx of all exchanges increased a few hours ago. It indicates that the whales, relatively speaking, have deposited $ BTC in exchanges. But long-term on-chain indicators say buying pressure prevails. I still think we can break 20k in a few days.
The average influx of all exchanges increased a few hours ago.
It indicates that the whales, relatively speaking, have settled $ BTC to exchanges.
But long-term on-chain indicators say buying pressure prevails. I still think we can break 20k in a few days.
Chart 👉 https://t.co/mL1j2ZqVf8 pic.twitter.com/6ErmJHrS4v
– Ki Young Ju 주기영 (@ki_young_ju) November 26, 2020
The crash may also have been influenced by tighter regulation of self-hosted crypto wallets by US Treasury Secretary Steven Mnuchin. Coinbase CEO Brian Armstrong declared that if the new regulations announced yesterday go into effect, this could be a big setback for Bitcoin and the cryptocurrency market:
If this cryptocurrency regulation does come out, it would be a terrible legacy and have long-standing negative impacts for the United States. At the beginning of the internet there were people who demanded that it be regulated like telephone companies. Thank goodness they didn’t.
Meanwhile, data analytics firm Santiment describes that Bitcoin is still drawing bullish indicators, but there are some metrics that point to a near-term correction. Bitmex’s funding rate is currently still positive, which means there are more long positions on the derivatives exchange than there are short positions. In the past, however, it is precisely in such situations that strong corrections have occurred, with all long positions liquidated by a sell-off. Santiment States that BTC can continue to grow, but traders should be vigilant:
There is probably still room for BTC growth, but the sudden increase in the positive funding rate (if it happens) is worth keeping an eye on, as a warning sign for a possible high.
Furthermore, activity on social networks has risen to local highs, which also indicates an overheated market. As soon as most investors get nervous, the peak could be reached and a corresponding correction could follow:
… a sudden turnaround in the crowd on Longs and a spike in Social volume will likely be the maximum as the crowd gets excited.
Source: https://twitter.com/santimentfeed/status/1331797612542844928
While some indicators point to a correction, it remains to be seen whether Bitcoin will continue to decline or whether the upward trend of the past few weeks will continue, Santiment said.
[ad_2]Source link
