Bitcoin (BTC) hit a whole new high on several exchanges on November 30, but one record in particular hit the headlines for another reason.
Data from the cryptocurrency exchange platform Kraken shows that BTC / USD reached a full-time high in the order book and then fell to $ 16,600 in seconds.
Kraken BTC price loses $ 3000
The cause of the crash, which would have wound up a large number of positions and would have caused great pain to many speculators, was most likely known as the “stop loss operation”.
Stop losses are associated with large traders who deliberately place large sales orders at a certain price and then target where they think a large number of stop losses lie. In this case, the target was around $ 16,600, which was close to the local bottom last week.
The result is a series of pressures from salespeople, who, if successful, deliver results very quickly, only until the market recovers later, once the process is complete.
Kraken XBT / USD one-minute chart. Source: TradingView
Liquidity risk is always a crucial factor when trading currencies, and Kraken’s $ 3,000 1-minute hedge explains exactly why traders should be wary of important price points.
Another explanation, or perhaps the one that contributed to this event, is that investors chose to go for around $ 20,000 to avoid the cost of a sudden reversal of resistance.
Bollinger warns against “Classic Top Formation”
John Bollinger, creator of the Bollinger Bands Volatility Indicator, warned: “Okay, time to pay attention, $ BTCUSD. It’s a great classic setting. ”
“There is no confirmation yet, and the setting can be easily changed, but wise traders should wash their cups.”
When asked by a Twitter user if this is a local high, or if the price of Bitcoin will fall from here, he replied that “at the moment there is a possible internal peak …”
Meanwhile, after the Kraken, Bitstamp also reached a record high of $ 19,869, with BTC / USD falling to $ 19,000, a level the pair had recovered just hours before.
Meanwhile, Binance sums it up: “For those of you who are optimistic about #Bitcoin, this is the day you’ve been waiting for today.”