3 reasons why traders want to buy Bitcoin if it drops to $58.5k. BTC is retesting major support and resistance levels, and analysts believe that if Bitcoin can close above $63,000, the long-term outlook will remain bullish.
Cryptocurrency traders are scrambling and scratching their heads after a sharp drop in the price of Bitcoin (BTC) triggered a market-wide sell-off on Nov. 16, with nearly every token in the top-200 flashing red.
According to data from Cointelegraph Markets Pro and TradingView, the Bitcoin price fell as low as $58,609 before finding buyers who bid it back up to $60,500.
3 Reasons Why Traders Want To Buy Bitcoin
Here’s what some traders and market analysts are saying about the recent downside move, and whether it’s just a shakeout or a sign that darker clouds are gathering.
BTC is exploring support and resistance levels
Options trader and pseudonymous Twitter user ‘John Wick’ provided insight into BTC’s daily price action by posting the chart below, which highlights some important support and resistance zones.
Wick believes Bitcoin is just testing the resistance zone around its new all-time high, and he anticipates a drop into the $58,000 to $59,500 range. Reasons why traders want to buy bitcoin if it drops to $58.5k. similar to the move seen in the early trading hours on Nov. 15.
Wick said,
“We are simply testing the range low of the resistance zone. If we break it on the close may test support zone.”
Similar observations were made by market analyst and pseudonymous Twitter user ‘Rekt Capital,’ who posted the following tweet zooming out and looking at BTC price action on the monthly chart.
The price action on Nov. 16 was a retest of the monthly support/resistance level at $58,700, as mentioned by the analyst. Now that BTC has successfully rebounded near the monthly $61,000 level, a bullish case can be made for the price to close the month above the level in the coming weeks.
There’s still a chance that $54,000 will be hit
Michael van de Poppe, a market analyst and Cointelegraph contributor, provided a level-headed analysis of the latest price action, posting the chart below of a possible BTC price trajectory over the next week.
van de Poppe said,
“So far, so good on Bitcoin. Bouncing from support, but still needing to break some crucial areas here, which didn’t happen yet. Let’s go for that first. $63,000 is important. No breakout there [leads to] further downwards momentum.”
According to van de Poppe’s chart, if the downward trend continues; the price of BTC could fall to its next support level of $54,000.
Fractal patterns suggest an approaching price rally
In response to concerns about $69,000 being the cycle peak; crypto Twitter analyst ‘Allen Au’ posted the following side-by-side charts of Bitcoin from 2013, 2017, and 2021. Reasons why traders want to buy bitcoin if it drops to $58.5k. The latest downturn; according to the analyst, is not the cycle top, but rather the Wave 6 move seen in previous cycles. This means that “if the low is in, BTC could be on Wave 7 very soon!”
Should the outlined wave sequence play out; a Wave 5 peak of $69,000 is possible; a Wave 6 low of $58,600 with the potential to drop as low as $53,000; and a cycle peak of $190,000 to $260,000 in December 2021.
The total cryptocurrency market cap is now $2.651 trillion, with Bitcoin dominating at 43.2 percent.
The author’s views and opinions are solely his or her own and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk; therefore, before making a decision, you should conduct your own research.
Source: CoinTelegraph