The shallow pullback in Bitcoin (BTC) following the news of the CFTC’s regulatory crackdown on BitMEX and the late announcement that U.S. President Donald Trump tested positive for coronavirus shows that the underlying sentiment is still bullish.
Generally, most damage during such periods of negative news flow is caused by the squaring up of leveraged positions. Data shows that Bitcoin futures volume and open interest has been dropping since hitting the peak in early September.
This means that there were fewer long positions that had to be squared up in a hurry and it also may explain why a sharper crash was avoided.
Daily cryptocurrency market performance. Source: Coin360
Even though Bitcoin has largely been range-bound for the past few weeks, on-chain data shows a sharp inflow of new participants. Analysts view this user growth as positive because it suggests that new traders consider Bitcoin as a store of value.
Traders can look for the cryptocurrencies that bounce back quickly from the current weakness because that shows strong buying on dips. Let’s analyze the top-10 cryptocurrencies to spot the critical support and resistance levels.BTC/USD
Bitcoin once again reversed direction from close to $11,000 on Oct. 1, which shows that the bears are aggressively defending the zone between the 20-day exponential moving average ($10,704) and the 50-day simple moving average ($11,017).
BTC/USD daily chart. Source: TradingView
The price action of the past few days has formed a symmetrical triangle pattern, which shows indecision among the bulls and the bears about the next directional move. This uncertainty could resolve after the price breaks above or below the triangle.
The gradually downsloping moving averages and the relative strength index in the negative territory suggest that bears have a slight advantage.
If the BTC/USD pair breaks and closes (UTC time) below the triangle, it will sugges...