- Bitcoin has witnessed liquidation pressure throughout the past day that wiped out all gains from the ‘Elon Musk’ bombshell a few days ago.
- The selling pressure seen comes from a combination of spot and derivatives, and investors generally avoid risk.
- It is not known what could be the cause, but it can be a combination of technical weakness and turmoil within the traditional market.
- An analyst is now signaling that there is a strong possibility that a further decline is imminent for the entire market.
- He indicates that the cryptocurrency’s January low is the next level he’s watching closely, with a rebound here potentially allowing for a massive rise.
Bitcoin has seen wild price action in recent days. It all started with Elon Musk’s endorsement of BTC, which catalyzed a massive bombshell around $ 40,000 that has been wiped out completely in recent days.
This “FOMO” induced pump appeared to provide exit liquidity to holders looking to exit as it sold aggressively.
One trader thinks this is a sign of an impending downside as he is now targeting the cryptocurrency’s January low as a near-term goal.
Bitcoin Sinks As Bears Clear All ‘Elon Candles’
Earlier this week, Elon Musk changed his Twitter bio to “#Bitcoin” and commented that the change was inevitable in hindsight.
This skyrocketed Bitcoin by nearly $ 7,000 and caused nearly 500 million brief sell-offs.
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However, the selling pressure at those highs was significant, causing a massive pullback that has since erased any gains generated by Musk’s support.
BTC May Aim To Hit January Lows Soon
One trader believes that a move to Bitcoin lows in January could be considered, especially given the multiple rejections he posted on a key trendline.
“The bears have a clear pass from here in my opinion. Easy to turn around if it’s wrong, ”he pointed out gravely, pointing to the table below.
Image Courtesy of TraderSZ. Source: BTCUSD on TradingView.
Despite this sentiment, there appears to be a strong institutional supply of around $ 30,000, as the crypto rebounds whenever that level is reached.
As such, staying above $ 30,000 could give Bitcoin significant room for improvement in the days and weeks to come.
Featured image from Unsplash. Charts from TradingView.