Bitcoin Recovers After Experiencing Healthy Decline
Bitcoin went on a decline run over the last couple of hours that saw the leading digital asset drop to $15,700 before demand activities from traders took it back to its previous $16,000 trading level.
The latest decline resulted from the digital assets trial to breach the $16,355 resistance figure, which sent it crashing after an unsuccessful attempt. Analysts have pointed to three vital factors as to why the coin witnessed a drop in price in the early hours of the day. The listed factors were the daily moving average retest, a retest of the parabola level, and a weekend shakeout.
Analysts and experts expected a healthy decline
Traders and analysts often say that a quick decline run is always expected after every surge, so prominent analysts expected the much-anticipated drop to happen during the weekend. Reportedly, there was a list of sell orders when the digital asset’s price was close to $16,500, which were not pulled as the price began to move towards the $16,400 zone.
This means that traders were selling the digital assets, signifying that selling pressure was present. According to an on-chain analyst, the current market structure is encouraging traders because it shows that the market is bullish. In his analysis, the on-chain trader Willy Woo mentioned that even though shaking off the bearish technicals is expected, the market is still presenting an opportunity for buyers to buy more.
“This weekend trading setup is a straightforward one which shows that the market is shaking off the bearish technical, the short and mid-term on-chain fundamentals are showing bullish impulses. More coins are being taken off exchanges, which means more people are buying the coins. This is a simple buying opportunity for traders in the market,” Willy Woo said.
Bitcoin well placed to make another surge
The daily chart shows that the recent drop confirmed that Bitcoin was retesting the 10-day moving average. This move was vital because Bitcoin has continued its surge in the last few weeks after retesting the same MA. Assuming Bitcoin continued to drop after testing the MA, it means that a further breakdown in price should be expected.
Wit the coin recovering after testing the MA, it means that a price surge should be scheduled in the short term. On November 7, Bitcoin experienced a very similar move to this recent one after moving from $15,753 to rest at $14,344, which signified a 5% loss in price.
Furthermore, Bitcoin also recovered after testing the daily MA figure on the daily market chart. It was all the vital element that the leading cryptocurrency needed as it went to touch a two-year all-time high figure at $16,480, which showed that it had a strong breakout. Presently, Bitcoin is said to be in a parabola as it is presently building momentum to go higher with its price increase. The only thing that can stop it is if the cycle eventually breaks, which will signify a declining run.