This price action over the past 24 hours has liquidated $55 million worth of BitMEX positions, per data from Skew, shaking out the many investors who had longed BTC in the low-$9,000s, expecting a return to $10,000 and beyond.
With the sell-off shows no signs of abating — the Bitcoin price continues to trend lower as I write this (now at $8,800) — analysts are saying it’s time to keep a close eye on the charts, for BTC is rapidly approaching key levels of support.
Bitcoin At Key Supports Around $8,800, Analysts Say
According to a number of analysts, Bitcoin is currently in a key support region, which should hold if a bullish narrative is to be touted moving forward.
Filb Filb — an extremely accurate cryptocurrency trader who called Bitcoin’s price action for all of Q4 and the subsequent recovery into January and early-February — recently posted the below chart, showing that BTC has entered a region of “support confluence.”
More specifically, it just encountered the essential 200-day moving average, which analysts say is crucial for BTC to hold, as it would confirm the bull run narrative remains alive. Filb Filb claims that this is a region that should offer traders the opportunity to enter in on “good risk-return longs.”
There’s also Big Chonis, another well-known cryptocurrency trader, who noted that Bitcoin is in the midst of nearing the lower band of the one-week Ichimoku Cloud, now at $8,500.
$BTC – watch that lower cloud support…weekly #bitcoin chart. pic.twitter.com/ZZpoWXXa58
— Big Chonis Trading (@BigChonis) February 26, 2020
While the two analysts are currently eyeing different levels, the theme is clear: BTC failing to hold this region may suggest a return to a decisive medium-term bear trend, as a close under the Ichimoku Cloud and the 200-day moving average would suggest a reversion to a medium-term bear trend.
Just a Bottom Wick?
While there are fears of an extended bear market, some are convinced that the recent price action is but a bottom wick in the long-term trend of Bitcoin. Cryptogainz, a popular commentator and trader, just recently wrote:
“If 8.5k caves, even heavier bids at 8.2k. If 8.2k caves, monstrous bids at 7.8k. $btc is macro bullish. All this pushdown is doing is likely creating a monstrous bottom wick on a higher timeframe imo.”
His assertion that Bitcoin remains “macro bullish” has been echoed by a number of other analysts and investors, such as Willy Woo, who suggested in December that on-chain metrics are suggesting BTC is still in the midst of a bull run.
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