Bitcoin’s price correction may not be complete yet, on-chain data analysts warn

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Analysts say Bitcoin (BTC) could see a bigger drop in price or a period of consolidation. The two factors that could trigger more downturns are increased whale activity and short-term resistance.

Bitcoin whale watching

As reported by Cointelegraph, Bitcoin crashed after surpassing $ 19,400 on major exchanges. It fell below $ 16,400 before recovering slightly. However, analysts anticipate another possible decline, especially if BTC does not recover strongly in the short term.

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Two major trends caused the recent Bitcoin correction. First, whales started selling BTC for around $ 19,000, causing a spike in downward volatility. Second, this relatively small drop in prices triggered a cascading wave of liquidations in an overfunded futures market.

Bitcoin all exchanges mean inflow. Source: CryptoQuant

Ki Young Ju, the CEO of CryptoQuant, said more fixes could come in the short term. For example, the All Exchanges Inflow Mean indicator is still trading at high levels, which suggests that there is still a lot of selling pressure in the market. He said:

“More $ BTC corrections could come. The average inflow of all exchanges (144 block MA) remains high. In my opinion we will face some correction / sideways movement this week and it will cost $ 20,000 by December this year. I’ll be stacking a couple of sats a few days later. “

The timing of the whale sell-off is noteworthy as BTC turned down a crucial area of ​​resistance. A pseudonymous trader named “CryptoKea” has been discussing the level of resistance among the Mayer Multiple Price Bands since the beginning of November.

If history rhymes the trader said a major correction is likely. Such a trend would still be in line with previous bull cycles as BTC fell 30-40% before the rally resumed. The dealer said:

“The top of the bullish channel has done an excellent job as short-term resistance, just as it did in previous bull markets at this point. What happened historically after that? History never repeats itself, it often rhymes. These are the 200DMA historical trackback multiples that price found support after being rejected by the top of the bullish channel during this phase of the bull. Currently, the 200DMA is at $ 11.2,000, which is an increase of ~ $ 40 per day. “

In the short term, the main support for Bitcoin is $ 16,000. Below that, the next major support areas are $ 14,000 and $ 13,500.

The golden ratio multiplier identifies the most important support levels

Philip Swift, the inventor of Lookintobitcoin.com, said the Golden Ratio Multiplier indicator shows a rejection of the 350 DMA resistance.

The golden ratio multiplier. Source: Philip Swift

The Golden Ratio Multiplier identifies $ 16,000 and $ 13,000 as critical levels of support, much like the Mayer Multiple. Swift said:

“Boom! The price was decidedly rejected by the 350dma x 2 yesterday when CT seemed certain we would pass through. This indicator is very important in this cycle.”

Based on the two indicators, a relief rally into the next resistance areas is possible if Bitcoin recovers and consolidates above USD 16,000. If not, BTC runs the risk of testing the $ 13,000-14,000 support area.