The price of Bitcoin (BTC) surged over USD 18,000 on November 29, and even hit USD 18,209 on Binance. However, despite BTC’s weekend rally, traders are getting cautious.
Bitcoin is currently facing resistance around $ 18,200. This is also the 10-day moving average (MA) on the daily chart. As Cointelegraph reported yesterday, some traders are still expecting BTC to drop further in the near future before the rally can continue.
Why a bull trap for Bitcoin now?
A pseudonymous trader known as the “Crypto Capo” predicted that Bitcoin would see a relief rally to $ 18,000 if it fell to the $ 16,000 region.
On November 27, when Bitcoin was still around $ 16,700, the trader said it was ready to sell $ 18,000.
He added that he is now starting the hedge at $ 18,100 and plans to cut the hedge in case the trend reverses. In the short term, the trader noted that the first confirmation of a correction would be a drop to $ 17,400. He said:
“Beginning of building a hedging position. I don’t want to sell Alts bags as the entry was very good, so hedge is a better option here. The invalidity for coverage is clear. “
If Bitcoin continues to drop below $ 17,400 and eventually to $ 16,800, the trader said a drop into the $ 14,000 region would become likely.
However, if Bitcoin rises above $ 18,400 and consolidates at around $ 18,200, it would invalidate the bearish structure. Crypto Capo also noted that consolidating above $ 19,000 would invalidate the bearish setup entirely.
Another pseudonymous trader named “Loma” who was discussing a bullish structure for Bitcoin at $ 17,500 said he trimmed half of his long position.
The trader stressed that BTC is nearing resistance as it plans to close its weekly and monthly candles. Considering the $ 18,200-18,400 area remains a resistance area, the trader said:
“Half of the term closed at $ 18,080. It doesn’t seem too overexposed with resistance coming in the weekly m / monthly closes. Lots of buying opportunities if we crack $ 18.4 ~ Not many opportunities to buy if we don’t. “
There is a counter-bullish scenario for BTC
A technical analyst named “CryptoBirb” said that Bitcoin is usually exposed to two types of corrections: 15% and 30%.
The analyst said he expected a drop to $ 14,000 but also noted that it wasn’t guaranteed. He pointed to various technical indicators, including that BTC was oversold for the first time since the rally began. He wrote:
“There are two main types of corrections for BTC dollars: -15% and -30% declines. While expecting a region of ~ 14,000, I noticed that this is the first return to the middle and first oversold uptrend since the start of the rally – VERY strong signal. I wouldn’t mind ATH before Christmas. Who’s with me? “
The bullish scenario for Bitcoin would still require BTC to reclaim and consolidate $ 18,400 above it to confirm new support levels.
Popular trader filbfilb, meanwhile, said he is currently in cash as market uncertainty demands heightened risk management.
“In the event of a collapse below $ 15,000 and a reversal of previous support into the Resistance, this could be an uncomplicated brief opportunity,” he wrote in his weekly newsletter on Sunday.