Overnight Bitcoin (BTC) faced a violent rejection that caused its price to plummet to the lower boundary of an ascending channel it has established over the past several weeks. This rejection has shifted the overall market sentiment and has led many previously euphoric bulls to grow increasingly bearish.
It is important to note that the strength of this latest selloff may spell trouble for Bitcoin, as it was driven by nine-figure volume in a single 10-minute candle, suggesting that bears have underlying strength in spite of their recent weakness.
Bitcoin Plummets After Bears Garner Massive Strength
At the time of writing, Bitcoin is trading down 3% at its current price of $8,660, which marks a notable decline from its daily highs of $9,200 that were set at the peak of last night’s rally.
After tapping $9,200 BTC’s uptrend began to show signs of faltering, as it began to trail lower until it touched $9,100, which is around the time at which bears roared and sent the crypto reeling to $8,600.
This selloff occurred in the span of ten minutes and was driven by an influx of over $100 million in trading volume during this short period of time.
“$101,747,000 in a single 10-minute candle. A lot of volume on our first volatility spike of the year!” Bitcoin options and futures platform Deribit noted in a tweet.
$101,747,000 in a single 10-minute candle. A lot of volume on our first volatility spike of the year! pic.twitter.com/7XM3kwhWV8
— Deribit (@DeribitExchange) January 19, 2020
Because of the sheer size of this selling pressure, it does appear that Bitcoin’s bears may be strongly than they were previously thought to be.
A Break Below This Ascending Channel Could Mean Massive Losses Are Inbound
Teddy, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that BTC is currently hovering around the lower boundary of an ascending channel that it has been caught within for the past several weeks, with last night’s selloff marking a rejection at the channel’s upper boundary.
“#BITCOIN | $BTC Shorts didn’t fill, as they were spread on and above the resistance of channel – Have some SCALP long bids on dotted for a potential retest of the channel’s support as resistance – below it the bias of the structure would not look bullish, at all,” he explained.
#BITCOIN | $BTC
Shorts didn’t fill, as they were spread on and above the resistance of channel – DAMN IT.
__Have some SCALP long bids on dotted for a potential retest of the channel’s support as resistance – below it the bias of the structure would not look bullish, at all. pic.twitter.com/ZEZ9o8GTdM
— TEDDY ⛓️? (@teddycleps) January 19, 2020
If BTC’s bulls lose their recent strength and fail to hold Bitcoin above its current price levels, it could mark a major change in the cryptocurrency’s market structure, signaling that further losses are imminent.
Featured image from Shutterstock.