In my opinion, today’s correction (a little under 9% drop) was the result of three things- 1.) DXY rally; 2.) profit taking before $70k; 3.) MM/whale shakeout of leverage (using a fan favorite of China fud plus some dumping). You can see on-chain indicated over $23 million in longs were liquidated today.
These shakeouts and corrections are essential to keep the crypto market healthy and helps raise the floor. Otherwise leverage would continue to pile on, traders would take increasingly riskier positions, and when future correction finally hit it could lead to massive/chain liquidations and drop the price even more.
Looking at the price action, I feel extremely pleased with where we bounced, which landed perfectly on the earlier resistance-turned-support now. After a nice bounce back from $62.8k to around $65k, we are are currently ranging between a few support levels in the $64k range.
In the coming days our most likely scenario is consolidation over $62k on the 12h chart; and if enough bulls show up to the party, we could even hold a level over the 12h 20 (currently $64k), though I think another swing under it is highly likely before we rally again. On lower timeframes a wick under $62k is possible, but increasingly unlikely in my opinion.
If you see the “macro support” level lost, I see strong support for Bitcoin in the $60k range, with a possible wick into the high $50k range.
In any case, keep an eye on the local levels. On-chain looks healthy enough to support continued upside, so I don’t predict a massive drop from here. I think a consolidation through the week, and maybe towards the weekend we take another shot at the top of this range and $70k. But anything is possible, this is crypto after all, so trade safely and remember that stoploss.