Bitcoin price logs its second flash drop and buy back of the day that can be viewed only on the 1 minute chart. On Sunday, the price touched $846X twice with the second move being much more aggressive.
After the first dip the spot price of Bitcoin [BTC] bounced back around $300 from low at $875X. The price action orchestrates a similar dump and pump in the next two hours of reaching the high. It logs a low at $846X and then bounces back above $8700 in the next hourly candle.
Financial and crypto analyst, Mati Greenspan, tweeted,
Forget Netflix I'm about to binge watch #bitcoin.
WTF was that?!? pic.twitter.com/FfMyHv0moY
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) January 19, 2020
The price action was so violent that might have just been a mistake in a large order execution; fat fingers.
Traders Take Profit?
Nevertheless, it could possibly have been an attempt to take profits from the longs for the dip earlier. Huobi records a long list of long order liquidations above $8600 before the fall.
The price of the quarterly futures on Bitcoin breached $8950 mark later in the day, when the liquidations of the long orders began.
A Bullish Signal?
The volatility and uncertainty around the highs is palpable. The downside move of nearly $500 seemed to call the end of the bull run. A pullback to $7500 to $8200 range seemed likely. As reported yesterday, the bullish market structure remains intact above $7500-$7800 range.
Moreover, Intra-day derivatives trader, SalsaTekila tweeted that the buy backs from points of low volume range and the fact that price continues to hold the higher volume profile range might be turning a lot of bears and treats it as a positive signal, he tweeted,
Biggest part which made me close (short order) when I seen buyers chasing up around LTF (Lower Time Frame) POC (Point of Control) is the fact we have two very big downwicks showing aggressive buyers around 8500$.
Another derivatives and crypto trader, XC who was looking for a bigger pullback in Bitcoin from the $8800-$9100 range, closed his short orders as well. He tweeted,
Closed here. Hard buyback after forced sell off
Hence, while bearish plans are being dismissed more now, consolation around the $8500 could ensure before the bulls and bears take their stance for attack again.
Do you think the buy-backs is a positive or a negative signal? Please share your views with us.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com