- Bitcoin’s $12,000 resistance level was able to hold preventing it from advancing further.
- The rejection was followed by a steep correction that pushed BTC below a key support level.
- While rampant volatility may continue to reign the crypto markets, different index suggest there is more room to go down.
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Bitcoin has been rejected several times by a crucial resistance level over the past few days, which was the only obstacle before heading towards $14,000. Now, several on-chain and technical metrics suggest that a steep correction is imminent.
Greed Takes Over
Market participants became “extremely greedy” on Tuesday, Aug. 11, after the flagship cryptocurrency took another aim at the $12,000 mark.
But, as has happened in the past, Bitcoin’s hidden forces took advantage of such an overwhelming sense of optimism to turn the market around.
Roughly 47,000 BTC were sent to different cryptocurrency exchanges while the uptrend was reaching exhaustion. The spike in selling pressure, combined with a massive number of margin calls on overleveraged long positions, triggered a nearly 7% correction that saw Bitcoin drop to a low of $11,127.
Although the pioneer cryptocurrency was able to recover and move back above the $11,400 support level, the uptrend that began in early July may have been compromised by the recent price action.
Bitcoin Is Bound for Further Losses
IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that Bitcoin lost a critical support level that was acting as stiff support.
Based on this on-chain metric, the area between $11,530 and $11,860 was significant for the uptrend to continue. Approximately 1.3 million addresses had previously purchased over 1 million BTC around this price range.
Now that the bellwether cryptocurrency has moved below this zone, it is very likely that it will act as a stiff resistance. Holders within this price pocket may try to break even in…