Bitcoin whales are attempting to shake out emotional traders today, as the price finds itself back on the main support of a bullish pennant pattern. Will HODL’ers be able to hold their nerves at this critical time, or will panic selling force BTC out of the pennant? Let’s take a look.
Bitcoin 4-Hour Chart
Over the last 24hrs, ramped up selling has sent Bitcoin tumbling by a further $890 (-7.77%) – leaving the largest cryptocurrency by market capital fighting to stay above water around the $10,700 level.
Looking at the 4-Hour BTC/USD chart, we can see that the asset has recently picked up along the uptrending support of the bullish pennant that is has been tracking inside of for the past 3 weeks. This particular level overlaps with the 0.5 fibonacci level as well as the weekly close zone, and represents a critical area for BTC buyers to defend.
This ‘make or break’ moment creates a lot of fear and uncertainty, and particularly affects less experienced traders who are more easily scared out of the market.
In an attempt to shake out weak hands at this key level, BTC whales have upped their offensive over the last 8 hours with selling volume showing a marked increase on the MACD histogram. Their plan here is to trigger stop losses and force emotional traders to sell their positions so that they can scoop up cheaper BTC before initiating a new uptrend. Dead cat bounces and fakeouts are the common terms for this type of strategy.
What we usually expect to see from this type of strategy is a strong bearish breakout through the support which quickly snaps back above the level before the close,