Pullback of Bitcoin from 100 000 level gains momentum

As expected in the previous forecast, Bitcoin quotes tried to break through to the most important level of 100 000. However, at the first attempt, the price failed to consolidate at such heights, and market participants decided to lock in profits on long positions. Given the more than 30% appreciation of bitcoin in recent weeks, the current correction of 6% is very moderate. The potential for a continuation of the pullback is seen up to the 88 000 mark, where the bulls may try to regain the initiative.

Yesterday's statements by Donald Trump contributed to the deterioration of sentiment in financial markets. The future US president confirmed his intention to dramatically increase import duties on goods from China, Canada and Mexico immediately after the inauguration on January 20. Experts interviewed by Bloomberg estimate the immediate effect of duties on the cryptocurrency market as insignificant, but after a powerful rally, traders were looking for any reason to close long positions. Monday's news just became the trigger for massive Bitcoin sales.

IG Australia analyst Tony Sycamore draws attention to the very large volumes of investment that have come into the cryptocurrency market since the American election. In particular, about $7 billion were invested in Bitcoin ETFs in the US alone. Now the demand is gradually normalizing, for yesterday's liquidity outflow amounted to $438 million. According to Sycamore, further closure of long margin positions will put pressure on the price for some time.

Shiliang Tan, president of Arbelos Markets, does not expect Bitcoin quotes to recover this week. On Thursday, market participants in the US will celebrate Thanksgiving Day, and on Friday the US exchanges will have a shortened trading session. Traders from other countries are unlikely to be very active in such conditions. Probably, a new burst of volatility should be expected not earlier than the beginning of December. Until then, Bitcoin will continue its downward movement.

The nearest target of the bears may be the level of 92 000. In case of success, the price of the main cryptocurrency has a good chance to fall further to 88 000.

Consider the following trading strategy:

Sell BTCUSD at the current price. Take profit 1 – 92 000. Take profit 2 – 88 000. Stop loss – 98 500.