The Bitcoin price has fallen by 2 percent within an hour and traders did not expect it. 3 reasons for the decline.
Bitcoin ( BTC ) price fell 2 percent in less than an hour on November 2. Traders were surprised by this. The Anon System market opened with a new gap, making $ 13,100 an interesting area for sellers.
Three technical reasons contributed to the abrupt decline in Bitcoin’s price. CME Gap, Key Resistance, and Monthly Moving Averages (MAs).
There are now four CME Bitcoin futures gaps
The CME bitcoin futures market is closed on weekends and public holidays. That means that if BTC rises or falls sharply these days, there will be a gap between CME and cryptocurrency exchanges.
While there is no comprehensive theory as to why traders fill CME futures gaps , historically most of the CME bitcoin gaps have been filled.
Bitcoin has seen a strong rally since October . Over the weekend, the BTC volume tends to decrease and the market becomes less active. However, in the past few months, BTC has grown steadily without any decline in volume.
As a result, this resulted in four CME gaps in a row. Every weekly candle in the past month created a new CME gap, which is rare for Bitcoin. This means that even on the weekends, BTC moved so fast that new consecutive gaps appeared.
The gaps are at $ 13,100, $ 12,970, $ 11,505, and $ 11,100. These areas could be of interest to sellers. The range between $ 12,970 and $ 13,100 is an important area in terms of moving averages.
The next short-term monthly moving average for Bitcoin is below $ 12,500
On the Bitcoin monthly chart, the next short-term moving average is the 5-day moving average at $ 12,203. Throughout history, even in bull phases, at least one short-term moving average has been reached on the monthly chart before a rally resumed.
Bitcoin has rallied rapidly since early October, rising more than 25 percent from $ 11,775 to $ 13,500. The pace of the rise meant that BTC was unable to establish clear support levels on the longer time frames.
For the past two months, Bitcoin has repeated the rally pattern, followed by a brief period of consolidation. This provided clear levels of support and resistance on the daily chart and made the rally sustainable compared to previous ones.