Bitcoin whale clusters indicate that the $18,600 level is the key short-term resistance level for BTC price.
The price of Bitcoin (BTC) has begun to recover on Dec. 12 after falling below $17,700 yesterday. Whale clusters show that the $18,600 level is still the biggest short-term roadblock.
Whale clusters form at a price point where whales accumulate BTC and do not move them. Since whales are more likely to sell at a profit or breakeven rather a loss, clusters normally act as support or resistance levels.
In the short term, whale clusters from Whalemap indicate $18,600 and $18,800 as the key resistance areas for the Bitcoin bulls.
Bitcoin must reclaim $18,600-$18,800 to reignite rally
As previously reported, BTC first saw a risk of a deeper correction without a strong reaction from buyers above $18,000.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said the $16,000 level is the last important support area before $13,000. As such, the $17,600 support area is critical because a fall below it could leave BTC vulnerable to a prolonged downtrend with even lower supports getting tested.
But, Bitcoin has begun to recover and whale clusters suggest a relief rally to $18,600 to $18,800 is becoming likely. Based on technical support and resistance levels, pseudonymous trader Mayne, reaffirmed that $18,700 remains an area of interest for sellers. He noted:
“If this reject confirms we are gonna see another leg down. Seems like the $17.2k long trade is crowded, do we get there or just nuke thru. Reclaim $18k and we might squeeze some late shorts over the weekend back up towards $18,700.”
Traders have also become more cautious in net shorting BTC in the past days. Although the trend of BTC has dwindled since the beginning of the week, some experts believe that the inflow of large capital from institutional investors could offset the risk of a severe pullback.
Another pseudonymous trader known as “Salsa Tekila” said that “irrational FOMO shorting” likely caused Bitcoin to drop. After an intense drop, a relief rally becomes more probable. He said:
“I’m not so eager to short hedge anymore, probably going to stay spot long and scalp quietly from here. Nice 150MM$ mint, nice down-move following good news, as if people FOMO shorted irrationally. Last good news, $BTC pumped before tanking hours later, different reaction.”
Where are the whale cluster support zones?
Above $17,000, Whale clusters indicate two ley support areas at $17,170 and $17,700. On Dec. 12, when the price of Bitcoin fell to $17,572 on Binance, Bitcoin faced a quick reversal and recovered above $17,700 within three hours.
It’s rapid recovery from $17,600 to $18,400 within 24 hours shows that there is high buyer demand below $18,000. In the short term, the aggressive bidding at the whale cluster support from buyers would likely prevent a steep correction.
However, one issue in the foreseeable future is the Crypto Fear and Greed Index. The latest reading still shows “extreme greed” at 90 out of 100, which suggests that the downside risk is still high.