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The price action over the past few days has undoubtedly been positive for Bitcoin. Case in point: the cryptocurrency ripped over 20% higher from the mid-$7,000s to a price as high as $9,500 over the course of 48 hours.
Prices have since consolidated at $8,800, with BTC finding itself stuck between support around $8,500 and resistance at the ever-important level of $9,000.
The consolidation, unfortunately, could result in a further sell-off as an analyst has noted that a large Bitcoin sell wall has formed on Binance.
Sell Wall Could Put Stop to Rallies
Although Bitcoin has been making attempts at rallying higher over the past few hours as of this article’s writing, a top analyst observed that a sell wall consisting of 1,000 Bitcoin — worth over $8 million — has just recently appeared on Binance.
Should BTC fail to catch a bid during any attempt at rallying in the coming hours, it could be strongly rejected by the Binance sell wall, which will act as resistance for the cryptocurrency market as long as it is on the order book.
Adding to the threat the sell wall poses to Bitcoin in the near term, Bloomberg also recently observed that the cryptocurrency recently became technically overbought “based on the GTI Global Strength Indicator,” with the momentum oscillator recently crossing above 70.
“With Wednesday’s jump above $8,000, the largest cryptocurrency entered overbought territory based on the GTI Global Strength Indicator. Assets are considered overbought if the reading exceeds 70 and could indicate that it may be difficult for the token to notch additional gains in the short-run,” the outlet wrote.
This confluence corroborates an analysis by a top crypto trader, who identified that Bitcoin is likely to correct towards the low-$8,000s due to the rejection at a key Fibonacci Retracement level. He wrote:
“Bitcoin made 5 waves down on the smaller timeframes, ABC back up and swiftly rejected the 0.618 almost to the $. Now I think we get one more leg down into low $8ks. This will be a buy the dip opportunity in a strong uptrend.”
Bitcoin Still Has a Bullish Trend
Despite the risk of a short-term correction, there is a growing number of prominent investors and traders that believe the crypto market’s medium-term trajectory remains bullish.
Kelvin Koh — a former Goldman Sachs partner and current partner at The Spartan Group — recently wrote in an analysis that the ongoing COVID-19 outbreak is decisively bullish for Bitcoin and other digital assets.
Central banks injecting trillions of dollars worth of stimulus into all facets of the economy while BTC will see its block reward halving, Koh explained, are trends with “uncanny timing[s]” that “dramatically increase the odds that we get another exponential price spike for Bitcoin with spillover effects to other crypto assets.”
In terms of on-chain metrics, data companies in the industry like Glassnode and Coin Metrics have observed that the number of individuals using Bitcoin and other cryptocurrencies is on the rise, only corroborating the idea that a bull rally is brewing.
Photo by Ioana Cristiana on Unsplash
