Bitcoin (BTC) has had a huge month, as the price rose from $ 10,500 to $ 13,800. However, the last few days have seen a setback due to the growing concerns about the Coronavirus. Bitcoin’s price dropped from $ 13,800 to $ 12,900 on October 28, making the latest breach fake.
Aside from the correction in the cryptocurrency markets, the equity and commodity markets also showed weakness. When the S&P fell 4% on Wednesday, silver also corrected 6%. The only asset that performed relatively well is the US Dollar Currency Index (DXY). In other words, investors are flocking to dollars again in search of safety.
The 2-day chart shows clear resistance in the $ 13500-14000 range as there is a drop in this range. The range of $ 13,500 to $ 14,000 is the last major hurdle to reach a potential new record high. This region is considered important by many investors and traders.
The chart also shows a clear support area, ready to test in the upcoming period. This area is capped in the $ 11600-12200 range. If this area supports, then a new range can be built to start a period of healthy accumulation.
Similar to the fear of a return to complete embolism in Europe, the plane is also heading towards safety.
The first wave was there in March 2020, when the market fell as the market saw price against the US dollar. Thanks to this, the US dollar index (DXY) fell from 92.50 points. So far, it’s close to 94 points, as the recent jump in the DXY index has weakened other markets.
Bitcoin has fallen sharply in recent days, but even silver showed a 6% correction in just one day.
As the data shows, the correlation between Bitcoin and the DXY index has been reversed since the March crash. Also looks like gold movement.
What can be done from this data, however, is that the likelihood of further Bitcoin adjustments is increasing due to weakness in old markets and social unrest associated with potential barriers.
The correction will not necessarily be detrimental to the Bitcoin market at this time, as it may lead to further accumulation.
Most investors will definitely see a straight line of up to $ 200,000, but that doesn’t happen. At its best, Bitcoin is at the start of a new cycle in which the boring sides will repeat themselves. When all levels are tested, movements of the parabola may occur when the prices are opened.
A well-known concept is to breach the previous liquidity resistance. This is followed by an immediate fall in the region. This is called counterfeiting and is often used in the markets to remove liquidity.
As you can see from the chart, the clear resistance area is set at $ 13,250-13,400 and needs to be broken to maintain more momentum. If the resistance area cannot be removed, the probability of defect increases.
Levels below current prices are $ 12,700-12,850 and $ 11,600-11,800 as higher timeframe areas to seek potential support.
Only the final hell light scenario is expected if you lose the support area between $ 12,700-12,850. However, this drop should ensure massive sales for all cryptocurrency markets, with the altcoins making the most losses from such a correction in Bitcoin.