Bitcoin has faced an extremely strong correction since its local highs around $19,500. The leading cryptocurrency currently trades for $17,000 almost exactly, though fell as low as $16,200 just the other day.
That means that from its local highs, the leading cryptocurrency was down by over $3,000.
Many have not taken this correction well: just days ago, there were many expecting Bitcoin to move towards new all-time highs, citing a confluence of technical and fundamental trends.
But this rally actually formed a somewhat bullish candle, despite what conventional wisdom may lead some to believe. BTC actually bounced at an extremely important macro level.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Bitcoin Forms Bullish Candle Despite Drop
Bitcoin’s strong $3,000 correction actually stopped an extremely important macro technical level: $16,200.
A trader shared the chart below after the brunt of the downtrend, showing that Bitcoin’s weekly candle bounced at the extremely important macro level. As he shows, the level’s importance stretches back to the 2017/2018 highs. The chart shows that Bitcoin actually topped at $16,200 after a dead count bounce after the week that the coin corrected 40%.
Bitcoin finding support here on a weekly basis could confirm that the uptrend remains intact.
It is important that BTC does trade above $16,200 for the next two days to confirm the level as technical support.
Chart of BTC's price action over the past few years with analysis by crypto trader Alejandro (Pastore1314 on Twitter). Source: BTCUSD from TradingView.com
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For BTC
One More Drop?
Bitcoin may face yet another leg lower, though.
Ki Young Ju, the chief executive of crypto data analytics firm CryptoQuant, recently noted that whales have deposited a larger amount of BTC into exchanges than normal:
“BTC Whales are depositing to exchanges. I expect dumping in the short-run. All Exchanges Inflow Mean (144-block MA) hit 2 BTC. I think we’re in a danger zone. The price is likely to go sideways or down when whales are active on exchanges.”
Investors may be selling those coins, which may result in a further sell-off.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Bitcoin's Recent $3,000 Correction Actually Formed a Bullish Candle
