Bitcoin experienced a sharp trend reversal on Monday as it failed to find higher upside bids near $14,000.
The benchmark cryptocurrency fell by almost 3 percent, hitting an intraday low of $13,215 ahead of the New York opening bell. Its latest decline appeared two days after it touched a three-year high level above $14,000.
So it seems, traders decide to sell-off their long positions to secure short-term gains, primarily as they anticipated a period of high volatility ahead of the November 3’s US presidential election.
Bullish Fundamental Fractal
Konstantin Anissimov, the executive director at CEX.io cryptocurrency exchange, however, saw the latest decline in the Bitcoin market as good news. He cited Bitcoin’s historical price actions during the previous two election seasons and their overall bullish impact on the cryptocurrency.
Mr. Anissimov told BlockDesk in an email conversation that he expects the price to recover after the Trump vs. Biden war is through. Excerpts from his statements:
“The bellwether cryptocurrency took a 20% nosedive approximately two weeks before the election in 2012. But a few days later, it recovered and resumed its uptrend. A similar price action took place in 2016 as BTC dropped nearly 12% five days before the U.S. election to then rebound towards higher highs.”
The analyst further integrated the bullish narratives that have proven instrumental in driving the Bitcoin prices upward. One of them is the supply shock that followed shortly after May 12’s halving, an event that slashed the daily Bitcoin Supply Rate from 1,800 BTC to 900 BTC.
“The market is still assessing the impact of the supply shock Bitcoin experienced after its halving, history may repeat itself,” asserted Mr. Anissimov. “On-chain data shows that both BTC and ETH sit on top of massive supply barriers that may have the ability to absorb any downward pressure. Therefore, the odds currently favor the bulls.”
Bitcoin Technical Data
On a 4H chart, Bitcoin was forming an Ascending Triangle formation, a bullish layout that typically develops during an uptrend as a continuation pattern.
Just today, Bitcoin formed a long downward wick on a 4H candle towards the lower trendline of the Triangle. It showed a bullish rejection, i.e. a higher buying pressure near the trendline area. That serves as one of the reasons why the cryptocurrency could undergo a rebound towards the upper trendline of the Triangle – around $13,850.
Meanwhile, breaking below the Triangle support would risk sending Bitcoin lower towards $12,700 – its previous support level.