Be careful about an insane shakeout wick even as Bitcoin price rallies north in the coming sessions

Bitcoin price has once risen above $ 9.60, but it corrected lower to $ 9,502 at press time. Meanwhile, market analyst Ryan Scott warned that Bitcoin could undergo a reasonably massive rally coming up.

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Bitcoin price corrects lower upon breaching the $9,600 | Source: TradingView.com

Bitcoin price remained stable despite a correction below $ 9,600

Bitcoin has established a quarterly high at $ 9,686 as bids for safe-haven assets, including gold, picked momentum against rising unemployment claims, and US-China geopolitical tensions. The jump later fest daytraders to secure their short-term profits at local peaks, causing a downside correction.

Bitcoin for immediate delivery was down 1.41% to $ 9,549 per token for profit-taking. The correction emerged as part of a broader uptrend starting in March 2020. After Bitcoin bottomed near $ 3,858, a series of expansionary policies by central banks helped it recover. Since June 1, 2020, the BTC / USD exchange rate has topped nearly $ 10.5.

Ryan Scott, the co-founder of Blackroots – an investment consulting firm focusing on cryptocurrencies, has warned traders about the market situation. Market analysts have asserted that traders have become hyper-bullish on a small bullish move. But in fact, Bitcoin is still trading within the key range of $ 8,800 – $ 10,500. Cryptocurrency has repeatedly failed to violate the upper threshold due to the high selling trend near it.

A large wick amid booming upside attempts represents the price fluctuating away from its day’s opening and closing rates. On March 13, 2020, for instance, the BTC / USD exchange rate formed a long wick reaching as low as $ 3,858. But the closing price on the same day was 46% higher at $ 5,637.

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Bitcoin wick from March 2020 encircled in red | Source: TradingView.com

Scott stated:

“No matter what, as a real heads up for all those who are hyper-bullish BTC. If this breaks out of this range, at some point, there will likely be an insane shakeout wick that violates what you consider is the lowest low that could be violated for market structure.”

An astonishing plunge could bring significant losses to traders, who have long dominated the ongoing protests, as Scott warned. Preventing losses, on the other hand, provides a degree of protection against price conflicts. Therefore, placing a limit of a few dollars below a high entry point can minimize traders’ risk.

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