- Bitcoin has witnessed tremendous selling pressure over the past day that has wiped out all the gains made a few days ago as a result of the “Elon Musk” pump.
- The perceived selling pressure comes from a combination of spot and derivatives, with investors typically at risk
- It remains unclear what could be the cause of this, but it could be a combination of technical weakness and turbulence in the traditional market
- An analyst now notes that there is a strong possibility that another downside is looming for the entire market
- He points to the cryptocurrency’s January low as the next level he is closely watching, with a bounce here potentially enabling a massive advantage
Bitcoin has seen some wild price action in recent days. It all started with the approval of Elon Musk BTC, which catalyzed a massive pump to $ 40,000 that has been completely cleared in recent days.
This “FOMO” -induced pump appeared to provide exit liquidity to containers that wanted to get out, as it was sold aggressively.
A trader believes this is a sign of impending downside as he now points to the cryptocurrency’s low in January as a short-term target.
Bitcoin crashes as bears erase the entire “Elon Candle”
Earlier this week, Elon Musk changed his Twitter bio to “#Bitcoin”, noting that the change was inevitable in retrospect.
This caused Bitcoin to rise nearly $ 7,000 and cause nearly half a billion in short liquidations.
However, the selling pressure at these highs was significant, sparking a massive rejection that has since resulted in the erasure of all the profits owed to Musk’s approval.
BTC could soon move to the January low
A trader believes that a move towards Bitcoin’s January lows could be in the cards, especially given the multiple rejections it posted on a major trendline.
“Bears have a clear invalidation from here imo. Easy to flip for a long time if it’s wrong, ‘he commented gravely as he pointed to the table below.
Image Courtesy of TraderSZ. Source: BTCUSD on TradingView.
Despite this sentiment, there appears to be a strong institutional bid around $ 30,000 as the crypto bounces back every time this level is tapped.
As such, a possession could yield more than $ 30,000 Bitcoin with room for significantly more upside in the coming days and weeks.
Featured image from Unsplash. Charts from TradingView.