The crypto markets incurred a significant amount of selling pressure late-yesterday that sent them reeling downwards, surrendering a decent portion of the recent gains they have incurred as a result of the massive rally that has been taking place since early-April.
Despite the recent drop, some analysts believe that Bitcoin’s rally may not be done just yet, as a bout of coordinated selling may have sparked this temporary downwards movement.
Bitcoin (BTC) Plummets Towards $7,000
At the time of writing, Bitcoin is trading down 11% at its current price of $7,100, down significantly from its 24-hour highs of over $8,000.
Over a one-week period, Bitcoin is still up significantly from its lows of $6,300 but is down slightly from its highs of nearly $8,400 which were set this past Wednesday.
Although this latest move downwards has drastically shifted the market’s sentiment for the worst, it is important for investors to keep in mind the fact that the latest pullback comes on the heels of a massive rally that put a significant amount of distance between Bitcoin’s current price and its 2018 lows of roughly $3,200.
As for what may have caused this latest pullback, Dovey Wan, a popular figure on Twitter and a founding partner at Primitive, explained that this recent drop was sparked by a large sell order of 5,000 BTC on Bitstamp, which may have sparked the downtrend.
“This is what happened: 1. A jackass put up an aggregated sell of 5000 $BTC on stamp. 2. Stamp poor depth + algo glitch? 3. Bmx index is 50% on stamp. 4. Massive Bmx liq tanked the mkt. 5. Despite all BTC quickly bounced back to $7000… This might be the best chance to BTFMD,” Wan said, bullishly concluding that now may be the time to “buy the dip.”
This is what happened
1. A jackass put up an aggregated sell of 5000 $BTC on stamp
2. Stamp poor depth + algo glitch?
3. Bmx index is 50% on stamp
4. Massive Bmx liq tanked the mkt
5. Despite all ☝?BTC quickly bounced back to $7000
This might be the best chance to BTFMD
— Dovey 以德服人 Wan ?? (@DoveyWan) May 17, 2019
Analyst: BTC Must Break Back Above 4-hour RSI and Candle Resistances to Continue Surging
Although it is unclear as to whether or not the current drawback is over or if further losses are imminent, it is important that Bitcoin breaks above newly formed resistance levels in order for it to continue surging upwards.
The Cryptomist, a popular cryptocurrency analyst on Twitter, spoke about Bitcoin’s important resistance levels in a recent tweet, noting that BTC is likely to test both its 4 hour RSI resistance and its recently formed candle resistance in the next few days, which will give traders greater insight into whether or not BTC will be able to continue surging higher in the near-future.
“After a week of warning about the RSI support, we finally broke it. CME gap also filled. I am watching to see how we react upon the RED RSI support line. 4hr RSI & candle resistances that led to this drop need to be broken for bullish momentum. Should test in next few days,” she said.
After a week of warning about the RSI support, we finally broke it ?
CME gap also filled
I am watching to see how we react upon the RED RSI support line
4hr RSI & candle resistances that led to this drop need to be broken for bullish momentum
Should test in next few days pic.twitter.com/sIpSMGtnWx
— The Cryptomist (@TheCryptomist) May 17, 2019
As the week wraps up and the weekend trading session kicks off, the magnitude and long-term importance of Bitcoin’s latest pullback will likely grow much clearer.
Featured image from Shutterstock.