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Could Bitcoin start a short-term downward trend?

Photo of: Nathan VDH
by Nathan VDH

Bitcoin has again crossed the $11,500 in the evening of yesterday, October 16, 2020. It remained there until today, October 17, 2020, at around $11,300.

Bitcoin quickly climbed back above $11,300 before falling back below this level a second time, forming a trough at $11,264.

The bulls were once again able to push Bitcoin above $11,300 but within a day, the top line of the $11,100 – $11,300 major support zone broke down twice.

This support is weakening and Bitcoin could land below $11,100 in a future test of this support zone. Bitcoin is currently losing about 1% daily; it is trading at $11,322 at the time of writing.

Yesterday’s correction of almost 3%, which took Bitcoin from $11,500 to $11,200, coincides with the announcement of the suspension of all withdrawals by OKEx as of 11:00 am Hong Kong time.

This decision would, according to the exchange, be linked to an ongoing investigation of one of its private key holders. OKEx holds approximately 10% of the outstanding Bitcoins offer.

The markets are therefore victims of this exogenous factor. From a technical point of view, the daily RSI(14) has fallen below 60 showing a weakening bullish momentum.

Yesterday was Friday and Bitcoin did not return to the $12,000. It even shows signs of weakness that could lead the BTC into a bearish trend in the very short term. Square had propelled Bitcoin above $11,000, the bullish trend had even allowed the BTC to make a foray above $11,700. OKEx could sign the end of this bullish period. In the end, it is only the very often daily market reality that savvy traders are familiar with: there are days with and days without.

However, it must be noted that this is only short term analysis, on the long term, there have rarely been such bullish signs for Bitcoin so for many traders, the best move at this point is simply to hold and wait for more information.