The rate of Bitcoin (BTC) is revealing total weakness as it has a hard time to establish $34,000 as an assistance level. In general, BTC appears to be stagnating without signs of a short-term relief rally, leading traders to be careful.
One concerning trend is that the volume of Bitcoin has actually been stagnating along with its price, apart from the “Elon pump” on Jan. 29. This trend shows that there is an overall drop in purchaser demand considering that the $42,000 top regardless of BTC hovering in the low $30,000 region.
Crypto Fear and Green Index (78 or “extreme greed”). Source: Digital Assets Data.
Additional signs that BTC rate might see another pullback include the Crypto Fear and Greed index remaining at “extreme greed” levels and Google searches for “Bitcoin” visiting 50% given that multi-year highs seen earlier this month..
Title: Is the weakness of Bitcoin after the Elon Musk pump hinting at a bull trap?
Sourced From: cointelegraph.com/news/is-the-weakness-of-bitcoin-after-the-elon-musk-pump-hinting-at-a-bull-trap.
Published Date: Sun, 31 Jan 2021 11:00:00 +00002021s Most Anticipated Growth & Wealth-Building OpportunityJoin Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency TogetherCLAIM YOUR SEAT!Read More.
” Exchange Whale Ratio hit the eight-month high, meaning $BTC might have a large red candle light if the price drops. Its supposed to be below 85% if this bull-run is legitimate.” Were at that point where $BTC is far enough from the 30k for me not to be comfy longing with any form of utilize however at the exact same time I wouldnt short. Another popular pseudonymous trader known as “Byzantine General” argues that the rally is broken. Even if Bitcoin is bullish in the macro photo, more drawback is possible up until it sees a persuading breakout on lower time frames.
BTC/USDT 4-hour rate chart (Binance). Source: TradingView.com
Bitcoin gets choppy after reviewing $38,000.
On Jan. 29, the cost of Bitcoin increased to as high as $38,461 on Binance after Tesla CEO and the worlds wealthiest guy, Elon Musk, ostensibly revealed support for Bitcoin.
Prior to this rally, on-chain analysts were already warning that the momentum of Bitcoin was slowing.
Ki Young Ju, the CEO of CryptoQuant, for example, pinpointed the high selling pressure from Bitcoin miners as an indication of a short-term bearish scenario.
Although the price of Bitcoin briefly rose 14%, it snapped back down to sub-$ 34,000 within 24 hours. For this reason, compromising on-chain signs were likely a caution that BTC would retrace the majority of its “Elon pump” gains..
Ki wrote before the rally:.
” Exchange Whale Ratio hit the eight-month high, suggesting $BTC may have a big red candle if the price drops. Its supposed to be listed below 85% if this bull-run is legitimate. Otherwise, its likely to be a bull trap.”.
Whales likely offered as the price of Bitcoin quickly rose to the $38,000 resistance level, triggering a sharp correction.
With shaky on-chain indications and some selling pressure originating from miners, traders are also showing caution about longing BTC/USD in the near term..
A pseudonymous trader referred to as “Salsa Tekila” stated that he is not utilizing leverage up until Bitcoin breaks out or hangs back to $30,000. He said:.
” Were at that point where $BTC is far enough from the 30k for me not to be comfortable longing with any form of leverage however at the same time I wouldnt short. Being spot long up until a huge down/ tradition open/ most likely Monday early morning is best. NO LEVERAGE”.
Another popular pseudonymous trader known as “Byzantine General” argues that the rally is broken. Even if Bitcoin is bullish in the macro photo, more disadvantage is possible till it sees a convincing breakout on lower time frames. He kept in mind:.
” The bull run is still on IMO, but the rally is broken. If we re-claim the yearly TWAP we can continue ze pump, but up until then it looks kinda meh.”.
Bitcoin price chart with TWAP level. Source: TradingView.com, Byzantine General.
What to enjoy out for.
Traders and technical experts are carefully observing Bitcoins reaction to the $34,500 to $35,000 range.
If Bitcoin breaks out of it with strength, momentum, and high volume, then the probability of a short-term pattern reversal rises.
Nevertheless, if Bitcoin struggles to retest the $34,500 resistance level and continues to stagnate in the $33,000 region, the danger of a more breakdown to the $33,000 assistance remains.