Investor cost basis narrowly escapes a support/resistance flip as traders diverge over whether Bitcoin has really bottomed.
Bitcoin (BTC) wicked below $19,000 on Oct. 11 as crucial support saw its first test in a week.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
BTC shorts “priority” on low timeframes
A subsequent rebound saw the $19,000 return to remain unchallenged in the six hours since. At the time of writing, the pair traded at around $19,100.
Analyzing activity on the Binance order book, on-chain analytics resource Material Indicators predicted an incoming bout of comparatively volatile price behavior in line with “an increase in bid volume and whale activity.”
An additional print of the BTC/USD order book showed additional support building between $19,000 and $19,200, positions which proved unreliable given price action thereafter.
BTC/USD order book data as of Oct. 10 (Binance). Source: Material Indicators/ Twitter
Popular trader Crypto Tony thus remained firmly on the side of caution, preferring to go short BTC on the day.
“I won’t become even slightly bullish until we see a solid break of the downtrending trend line,” he told Twitter followers alongside a price chart:
“Every little bump most get overly bullish. Not a good sign in my opinion .. Shorts are the priority right now.”BTC/USD annotated chart. Source: Crypto Tony/ Twitter
As Cointelegraph reported, $19,000 remains an extremely influential price zone for those eyeing lines in the sand for the market, representing the overall aggregate cost basis across investor categories.
Faith in June lows remains
With general consensus favoring a fresh drawdown, those who believed that Bitcoin’s latest macro bottom — the $17,600 reversal in June — would endure, were few and far between.
Among them was popular trader Crypto Kaleo, who argued that the market was already in the Wyckoff-style “accumulation phase” which follows the bottom.
As such, those calling for Q4 2022 to mirror the 2018 bear market bottom sequence would be disappointed.
“I’m seeing more 2018 bear market fractal comparisons being used for this range, and I’m really not a fan of the idea at all,” Kaleo commented:
“In my opinion, we’ve already seen that major breakdown. We’re in the accumulation phase. The Mark Up will catch everyone off guard.”BTC/USD annotated chart. Source: Crypto Kaleo/ Twitter