Bitcoin whales are attempting to shake out emotional traders today, as the price finds itself back on the main support of a bullish pennant pattern. Will HODL’ers be able to hold their nerves at this critical time, or will panic selling force BTC out of the pennant? Let’s take a look.
Bitcoin 4-Hour Chart
Over the last 24hrs, ramped up selling has sent Bitcoin tumbling by a further $890 (-7.77%) – leaving the largest cryptocurrency by market capital fighting to stay above water around the $10,700 level.
Looking at the 4-Hour BTC/USD chart, we can see that the asset has recently picked up along the uptrending support of the bullish pennant that is has been tracking inside of for the past 3 weeks. This particular level overlaps with the 0.5 fibonacci level as well as the weekly close zone, and represents a critical area for BTC buyers to defend.
This ‘make or break’ moment creates a lot of fear and uncertainty, and particularly affects less experienced traders who are more easily scared out of the market.
In an attempt to shake out weak hands at this key level, BTC whales have upped their offensive over the last 8 hours with selling volume showing a marked increase on the MACD histogram. Their plan here is to trigger stop losses and force emotional traders to sell their positions so that they can scoop up cheaper BTC before initiating a new uptrend. Dead cat bounces and fakeouts are the common terms for this type of strategy.
What we usually expect to see from this type of strategy is a strong bearish breakout through the support which quickly snaps back above the level before the close, leaving a long wick beneath the candle. Novice traders who fell for the fakeout, are usually forced to buy back in at a higher price once whale traders initiate a new uptrend.
Bitcoin 30-Minute Chart
Over a closer time period we can see that Bitcoin price 00 is also tracking inside a small falling wedge, which appears to reach maximum consolidation around the $10,400 level.
Falling wedges are typically bullish reversal patterns, and supports the idea that Bitcoin will begin a new uptrend soon once the weak hands are shaken out.
On the MACD and RSI indicators we can see that short-term momentum seems to be improving, with selling volume decreasing on the MACD histogram and the RSI recovering out of the oversold region. Increased volume can also be seen as BTC bulls attempt to relaunch from the downtrending support.
What do you make of the Whale traders strategy? Let us know your thoughts in the comment section below!
Disclaimer: The views and opinions of the writer should not be misconstrued as financial advice
Images courtesy of Shutterstock, Tradingview
The post Bitcoin Price Analysis: Whales Test Weak Hands At Key Support appeared first on Bitcoinist.com.
Bitcoinist.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
TheBitcoinNews.com is here for you 24/7 to keep you informed on everything crypto. Like what we do? Tip us some Satoshi with the exciting new Lightning Network Tippin.me tool!