One economist thinks if Bitcoin (BTC) dips below $20,000 this week, it will be fundamentally different in nature than last week’s price plunge.
Alex Krüger tells his 137,500 Twitter followers the number of stop orders under $20,000 is “very small relative to what it was before.”
[adinserter block="1"]“Many traders like me shorted $20,000 and won’t be shorting $20,000 again as the reduced presence of stops makes shorting much less attractive.”
Traders typically enter stop-loss limits when executing a trade, instructing the exchange to automatically sell their positions once the asset reaches a certain price level.
Bitcoin is trading for $20,603.37 at time of writing. The top-ranked crypto asset by market cap is up more than 1.4% in the past 24 hours but down more than 2.1% in the past seven days. It remains more than 70% down from its all-time high.
Explains Krüger,
“The big difference for BTC and ETH between now and last week is that now a dip below $20,000/$1,000 would be for many buying opportunities, while last week a dip below $20,000/$1,000 were *strictly* for selling (panic sellers, forced sellers and breakout sellers).”
The economist predicts Bitcoin’s price will “run up a lot now,” which will punish panic sellers.
“I want to see a fast reaction up from here next couple of days. The best rallies are those that don’t give laggards an entry.
Entering now gives traders a 2:1, 3:1 risk reward.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Vadim Sadovski
