Why Bitcoin Price only lost $ 16,000 on a “typical” weekend drop

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Bitcoin’s price (BTC) has been volatile for the past 12 hours. The top cryptocurrency fell from $ 16,400 to $ 15,750 in a matter of hours and declined heavily after breaking the $ 16,000 resistance earlier this week.

As of November 14, the 20-day moving average of Bitcoin on the daily chart is $ 14,600. In the near future, the $ 14.6,000 level remains a favorable area for buyers if there is a pullback.

An algorithmic trader named “CryptoGainz” stated that Bitcoin’s current market structure likely resulted in a sell-off. The trader found that the abundance of sell orders was $ 16.5,000, which did not subside when BTC hit $ 16,400.

This could indicate that the sell orders at this level are not fake orders. This could show that sellers are really trying to make around $ 16,500 in profit from BTC.

Bitcoin’s daily price chart. Source: TradingView.com

Why $ 16.5,000 is a problem for Bitcoin in the near future

When traders or bots try to fake the Bitcoin market, they are placing fake orders at important support or resistance levels.

For example, if traders place large parodies near a resistance level, there is a chance that buyers will not enforce the resistance. Spoofing could therefore be used to artificially increase or limit the dynamics of a market.

The “inquiries” or sell orders above $ 16,500 have not gone away during the recent BTC rally. With that in mind, the likelihood remains high that $ 16.5,000 would act as a strong resistance level in the short term.

When BTC was hovering around $ 16,200 before the Bitcoin price drop, the pseudonymous trader stated:

“I wouldn’t say we’re going to use nuclear weapons, but at this point, smart companies with a lot of capital and intellectual property of a certain kind realize that the 16,5,000 inquiries there have long been dormant and don’t seem very close at the price climb. “

The trader found that algorithms could move to “chasing” stops of long contracts when it is profitable. Given BTC’s rapid decline in a short period of time, that’s likely what happened when BTC fell below $ 15,800. The dealer added:

“That is, if there is an algorithm that can profitably lower the price and flush longs, the conditions for its use may be engineered to maximize profit. tl; dr – as soon as it’s worth chasing longs, your stops will be made. “

Where BTC Price Can Go Next

Bitcoin’s outlook among traders and analysts remains mixed. Some traders say a deep retreat into the $ 12,000-13,000 range during this bull run is inevitable, if not healthy.

Cantering Clark, a Bitcoin trader, said that despite BTC’s strong momentum, a $ 13,000 retest could take place. He wrote:

“I love to be loud with everyone else when sh * t is pumping, but I secure my pocket and play right now at short notice. I think the market is hot rather than fast. Spot players don’t have it easy. “