It has been a rough past few days for Bitcoin, with the benchmark digital asset erasing virtually all of the gains that came about as a result of its strong uptrend seen throughout the past several days and weeks.
The cryptocurrency has mostly been consolidating for the past couple of months, with buyers ardently defending $11,000 while bears stopped it from breaking above $12,000.
The latest rejection it posted within the lower-$12,000 region happened just a few days ago and was the event that first caused the market to begin drifting lower.
Ultimately, it fell as low as $9,990 before it was able to find some significant buying pressure, which subsequently allowed it to rebound up towards $10,700.
It has been trading sideways between these two levels ever since, being unable to offer investors with any clear short-term trend.
That being said, it does appear that this movement was, in part, driven by panic selling from investors who “bought to top,” which may mean that the market is poised to push higher now that they have been flushed out.
Bitcoin Driven Lower by Influx of Panic Selling from So-Called “Top Buyers.”
Bitcoin and the aggregated cryptocurrency market have been seeing mixed price action in recent weeks, with BTC mostly consolidating while mid and low-cap altcoins see parabolic momentum.
This price action shifted firmly into bears favor yesterday, however, when BTC plunged to the lower-$10,000 region, where it is still trading at the present moment.
Whalemap – an analytics platform that tracks Bitcoin buying and selling activities – explained in a recent tweet that lots of investors who bought BTC within the mid-to-upper $11,000 region panic sold into yesterday’s decline.
“A lot of panic selling yesterday from HODLers who were quite successful in buying tops. Their strategy seems to be – buy high sell low.”
Image Courtesy of Whalemap.
Analyst: BTC Pullback May Still Extend Deeper
Although the panic sellers have been flushed out, one analyst believes that Bitcoin’s ongoing pullback could cut deeper in the near-term, potentially leading it down towards the mid-$9,000 region.
“BTC HTF Update: We had around 150 days of continues upside… After 150 days we then had 34 days of distribution… Price was up 165% in this time, this current pullback is likely not over, major support is at mid $9000’s.”
Image Courtesy of Cactus. Chart via TradingView.
As the weekend fast approaches, how Bitcoin continues reacting to its $10,000 support should offer some significant insights into its near-term outlook.
Featured image from Unsplash. Charts from TradingView.