Freaked out when I noticed that BTC’s price fell below the 200 EMA
The recent deep BTC price correction scared me, when I saw that the price of BTC had gone below the 200 EMA price level. I thought how come when the bull market is on, the price of BTC falls below the 200 EMA? Now, should I sell off my BTC holdings? .
Taken from https://www.tradingview.com/
Notice price managed to stabilise after it falls just below 200 EMA price range which is serving as resistance now
BTC’s price has stabilised
I expected an immediate re-bound, but na, price is still below 200 EMA(Exponential Moving Average). However, selling has stopped, with heavy buying having taken place at the 30.600$ dollar range.
Therefore, a slow pick up in price may be happening now, with downside volatility looking to have ended and price stabilising now with green candles showing up in the BTC 1 Day chart.
Then I understood what could have happened which I will explain in detail in another article.
Involvement of whale traders in bringing BTC’s price below key psychological support levels
This means that price manipulation has happened, this is because whale investors know how we investors generally trade. These investors are large institutional traders, they know that if they sell off BTC to take it down below the 200 EMA range most of us investors will sell off because we assume that if the price does not find support at the 200 EMA, it’s a bear market scenario where bitcoin would crash. Well, it definitely made me very frightened too that the BTC price had gone below 200 EMA .
This time BTC’s price was made to go slightly below the 200 EMA range so that weak hands would sell off their holdings and these whale investors could purchase BTC at cheap discounted rates.
You can learn more on this from the Coin Bureau video, where Guy explains this beautifully -
BTC is still in a bull run and this is just a deep correction.
Let’s look at price drops of other large cap cryptos
An interesting point to note is that major Alt coins like ETH and BNB managed to hold on to the 200 EMA support level, however LTC fell down to price levels just below 200 EMA range and has stabilised there, just like BTC has.
Taken from https://www.tradingview.com/
ETH price finds support at 200 EMA because buying prevented the price from falling below this level
Taken from https://www.tradingview.com/
BNB price finds support at 200 EMA because buying prevented the price from falling below this level
Taken from https://www.tradingview.com/
Selling happened in a way that ensured that LTC's price went just below the 200 EMA and found stability
This may also indicate that whale investors bought down LTC prices to below 200 EMA levels to scare investors and have them sell off their LTC holdings so that these big whales can buy up LTC at discounted prices.
One can check https://www.lookintobitcoin.com/ and see other indicators which show Bitcoin’s position in the market evaluating the data science of Bitcoin. For instance, checkout the stock to flow data of Bitcoin and right now that indicates that BTC is still undervalued in price.
https://www.lookintobitcoin.com/charts/stock-to-flow-model/
The stock to flow ratio is below the mean line currently(top section of the chart) and the price of BTC is undervalued as can be seen in the price variance chart (bottom section of the chart) with the price of BTC below value for its Stock to flow ratio position.
Please learn about these data science models and study them, they can be very useful for you to know if BTC is out of its bull run.
You know where to where to go to check out BTC's data science models - https://www.lookintobitcoin.com/
Don’t forget to understand more indepthly on how whales manipulated and brought BTC’s price down by watching Coin Bureau’s video here …
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