As the trade approaches the weekend, the rally is turning in favor of the bears as the star token experienced huge selling pressure.
The price of Bitcoin (BTC) experienced a downturn on Friday as the rally shifted in favor of the bears. The star token faced substantial selling pressure, causing the price to drop sharply. After nearly reaching one of the crucial resistances at $71,500, the price slashed hard, approaching the key support zone between $68,096 and $68,581.
While market participants anticipated a strong rebound to regain the lost levels, the trade setup suggested a different scenario. The BTC price appeared to be heading towards lower levels beneath the support zone.
Presently, the total open interest in Bitcoin hovered around $20 billion. These levels were comparable to those at the previous cycle's peak, suggesting that the price was at a similar point. Hence, if the price were to break higher, the open interest would likely follow suit. This possibility remained open as the token continued to hold above the crucial support zone, indicating that traders had acquired a substantial amount of Bitcoin within a specific range.
A renowned analyst, ALI, shared some interesting information, revealing that 1.97 million addresses had acquired nearly 964,000 BTC, which was pegged between the support levels of $69,380 and $67,350. According to the analyst, Bitcoin needed to hold and sustain at these levels to trigger strong upward momentum.
Despite the mounting bearish pressures, the price remained within an ascending parallel channel, substantiating the bullish claim.
The Bollinger bands were noted to be squeezing, while the DMI also showed signs of contraction, indicating that the price was experiencing a major volatility squeeze. This could lead to a substantial price action, with the direction largely dependent on the volume induced.
The current trade set-up suggested that the bears had gained substantial momentum, increasing the possibility of a bearish pullback.
Hence, the Bitcoin price, which attempted to find a base in the average range of the bands, might enter the key support zone and if bulls fail to display their strength, a steep plunge to $66,800 may be imminent.
