Bitcoin Struggles to Reclaim Momentum after Biggest Single-Day Loss of 2023
Summary:
Bitcoin faces the challenge of regaining its positive trend after the largest single-day slump in 2023. The top cryptocurrency, which dropped to $40,200 on Dec. 10, has new key support and resistance levels, with data releases and Federal Reserve decisions poised to influence volatility. Market watchers believe Bitcoin's current pause from significant gains was necessary for stability. This period unveils traders' strategy to 'buy the dip, sell the rip,' with new support forming at $38,500 according to Binance order book liquidity. Traders are also paying attention to major support levels around $38,000 and possible Bitcoin resistance walls at $43,850 and $46,400.
In the wake of the largest single-day losses of 2023, Bitcoin (BTC) strives to resurrect its positive momentum, working to recover after sinking to a low of $40,200 following the Dec. 10 weekly close, as evidenced by the newest data from Cointelegraph Markets Pro and TradingView.
BTC's current pause in its impressive climb, a breather many believe was warranted, marks the emergence of new meaningful support and resistance markers. The forthcoming days are likely to present numerous sources of potential market fluctuation, starting Dec. 12 with the unveiling of key US macroeconomic data, followed by the Federal Reserve's interest rate decision and commentary by Chair Jerome Powell.
More than just cryptocurrency markets could be implicated in the imminent face-off. Cointelegraph explores popular BTC price points of interest to traders and analysts as Bitcoin precariously maintains the $40,000 level.
With regards to Bollinger Bands, BTC's 7.5% decrease following the weekly close, while difficult for late-to-enter longs, allowed a necessary readjustment in the fevered crypto markets. John Bollinger, creator of the Bollinger Bands volatility indicator, notes on X (formerly Twitter) that such a strong upward trajectory inevitably necessitates a substantial backlash, stating: "Very overextended, so a pullback was due.”
The sharp drop seen in daily timeframes lead to a 'textbook move' correction, landing Bitcoin straight on the middle band of the Bollinger channel, which promises positivity for future growth. However, Bollinger issued a prior warning concerning increasing constraints that might precede a local peak.
Detected actions from substantial Bitcoin buyers notably align with a strategy of 'buy the dip, sell the rip', particularly in light of a flush in open interest caused by the sudden drop. Material Indicators shared an overnight snapshot of BTC/USDT order book liquidity on Binance, the largest global exchange, revealing a new support band at $38,500. However, caution remains for larger players ingeniously manipulating the market.
Meanwhile, trader Ali highlighted a range near $38,000 as robust protection against significant losses. Ali reported that this range is supported by 1.52 million address holders collectively owning 534,000 $BTC — indicating two resistance walls at $43,850 and $46,400 that could inhibit Bitcoin's upward progress.
Simultaneously, Michaël van de Poppe, MN Trading's founder and CEO, invokes a slightly lower floor zone at $36,500. He expects Bitcoin to finish 2023 in a "new range."
This news piece is not intended as investment guidance or recommendation. Every investment/trading decision carries inherent risks; readers should independently conduct their own due diligence.
Published At
12/12/2023 11:55:04 AM
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