Oct 29, 2020
Market Confirms $13k Support, $13.8k Resistance
Before we begin, let me remind you that bitcoin is antifragile in where volatile and uncertain markets make it an increasingly valuable commodity. Year-to-date it is the best performing asset, outperforming save-haven gold and high-risk-high reward equities. A visual provided by Delphi Digital shows us how far bitcoin is ahead of the pack when it comes to fighting central bank and government intervention.
With bitcoin’s antifragile characteristic in mind, let’s continue with today’s market analysis.
Buying Pressure Low
As I said before, a pullback was expected but to what extent remains to be unknown. There is an overwhelming amount of data that is telling us that the pullback will be short lived and bitcoin will continue to make it’s way back to the resistance line.
In the last 24 hours we saw a 4% drop, bringing bitcoin back to levels from the previous day. This is bullish since bitcoin wasn’t run down further down the field, giving it less ground to cover. Considering that bitcoin increased by 36% in the last 35 days, a 4% drawback seems insignificant. What we must keep an eye out for is further selling pressure due to global market uncertainty.
Apart from global markets, bitcoin lost steam on the way up do to a lack of stablecoin inflows. CEO of CryptoQuant, Ki-Young Ju, warned us about this metric that would affect the buying pressure in the short term.
Ju has said that short-term affects could be here for the next 72 hours as investors transfer their USD-pegged tokens into exchanges.
New Whale Cluster
What stopped bitcoin from falling below $13k was the new interest from whales around that price level. As institutional investors continue to pile-in we have to calculate their affects on the market. Whale clusters indicate support levels since big purchasers accumulate at these levels, giving them the incentive to hold out for higher prices before cashing in.
According to on-chain data from Whalemap, $13k has emerged as a new key support level making it the ideal price floor for a rally. This ongoing rally is a bit different from previous uptrends since it’s considered more sustainable. This can be due to the constant price adjustments due to uncertain global markets, putting in small brakes whenever price seems to be moving to fast.
This type of movement first started on September 23rd as bitcoin rallied from $10.2k to $10.6k, then consolidated. Rally began once again on October 8th when it went up to $11.7k then stabilized to $11.4k. Then again on October 19th till where we are now, a consolidation around $13.2k. These price fluctuations have given whales the opportunity to accumulate in key areas.
If you want to see more data showing that price pullback will stop around $12.5k-$13k, you will find it, trust me. What I want to leave with you is that there’s a small but realistic chance that we may go as low as $10k and if it does then take it as an opportunity to accumulate. After all, it’s buy, low sell high, right?
