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The price of Bitcoin (BTC) topped $ 18,000 on November 29, reaching $ 18,209 on Binance. However, traders are being cautious despite BTC’s weekend rally.
Bitcoin is currently facing resistance of around $ 18,200, which is also the 10-day moving average (MA) on the daily chart. As Cointelegraph reported yesterday, some traders are still predicting that BTC will see another near-term decline before the rally can continue.
Why a bull trap for Bitcoin now?
A pseudonymous trader known as “Crypto Capo” predicted that Bitcoin would see relief at $ 18,000 as it fell into the $ 16,000 region.
On November 27, while the price of Bitcoin was still hovering around $ 16,700, the trader said he’s about to miss $ 18,000.
He added that he is now starting to hedge at $ 18,100 with plans to cut coverage if the trend reverses. In the short term, the trader noted that the first confirmation of a correction would be a dip to $ 17,400. he said:
“Start building a cover position. I don’t want to sell sacks of alts as the entry was very good so the hedge is a better option here. The invalidation of coverage is clear. “
If Bitcoin continues to fall below $ 17,400 and ultimately $ 16,800, the trader said a drop to the $ 14,000 region would become likely.
But, if Bitcoin breaks above $ 18,400 and consolidates at around $ 18,200, that would invalidate the bearish structure. Crypto Capo also noted that a consolidation above $ 19,000 would completely invalidate the bearish pattern.
Another pseudonymous trader known as “Loma,” who discussed a bullish pattern for Bitcoin at $ 17,500, said he cut his long position to half.
The trader pointed out that BTC is closing in on resistance as it looks to close its weekly and monthly candles. Considering that the area of $ 18,200 to $ 18,400 remains a range of resistance, the trader said:
“Closed half long at $ 18,080 ~ Not looking to be too overexposed to resistance ahead in the weekly m / monthly close. Lots of buying opportunities if we break $ 18.4 ~ Not a lot of selling opportunities if we don’t. “
There is a counter-bullish scenario for BTC
A technical analyst called “CryptoBirb” said that Bitcoin typically faces two types of correction: 15% and 30%.
The analyst said he expects a pullback to $ 14,000, but also noted that this is not guaranteed. He identified various technical indicators, including BTC in oversold territory for the first time since the start of the rally. he wrote:
“There are two main types of $ BTC correction: -15% and -30% declines. Looking ahead to the ~ 14k region, I noticed this was the first mean reversion and first crossover of oversold bullish momentum since the start of the rally – VERY strong signal. I wouldn’t mind ATH before Christmas. Who is with me.”
The bullish scenario for Bitcoin would still require BTC to recover $ 18,400 and consolidate above to confirm the new support levels.
Popular trader Filbfilb, meanwhile, said he is currently in cash as market uncertainty calls for increased risk management.
“In the event of a breakdown below $ 15,000 and a switch from previous support to resistance, this may present a simple and short opportunity,” he wrote in his weekly bulletin on Sunday.
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