Bitcoin price has started its correction below $ 17,000, resuming yesterday’s bearish downtrend. Traders react differently to the weakening short-term dynamics of BTC.
Some traders believe that BTC could drop to $ 16,000, or possibly $ 13,800. The likelihood of a dip into the $ 13,000 region remains slim, but that level is the previous peak of the June 2019 rally.
The hourly price chart of Bitcoin. Source: BTCUSD on TradingView.com
$ 13,800, $ 16,000, and $ 16,200: Watch Bitcoin Levels Traders
Traders are becoming cautious in the short term due to the trend Bitcoin saw overnight. On November 26th, overfunded long positions on the futures market were liquidated en masse.
This caused shock waves across the market and caused Bitcoin and other major cryptocurrencies, including Ethereum, to collapse.
A trader named “Cred” wrote::
“A pile of leveraged longs was crushed overnight, which is indicated by the drastic reduction in open interest. The levels aren’t particularly good up here, but I’m ready to dip buy on weekly structure / through the previous week’s low below $ 16,000. If not, I’m going to assume $ 13.8,000. “
A decline in the Bitcoin price was necessary for the derivatives market to neutralize. BTC’s funding rates before the correction were at unsustainable levels.
Despite Bitcoin’s technical strength, the rally reached a point where it was more imperative to sell BTC. There was also significant liquidity in the region at $ 16,000, making it a decent area of support.
In the short term, traders expect Bitcoin to experience either a larger decline or weaker momentum. An abrupt trend reversal has become less likely due to the sharp decline in open positions in the futures market.
As such, the $ 13,800 level makes lower support levels less likely with $ 15,000, $ 16,000, and $ 16,200 as immediate support levels in the middle.
What would a bullish trend reversal confirm?
Traders say reclaiming the $ 17,500 to $ 17,700 resistance area could aid BTC’s rebound for the foreseeable future.
A trader named “Salsa Tekila” said:
“I have the green light to buy BTC dips when we go above 17.5,000 again.”
However, if BTC hits the resistance area and rejects it again, there is still a possibility of a bearish continuation, at least in the short term.