An analyst, anonymously known as Pentoshi, informs his 600,100 followers on Twitter that, according to his observations, Bitcoin has hit the $20,000 price area thrice in the last 30 days.
The analyst feels that this price level will either lead the rally to move forward or cause it to plunge down further.
When technical analysis is considered, if an asset hits a certain price area multiple times, it indicates that a breakdown is approaching. This is also due to the fact that around that particular price range the demand for an asset has declined.
Pentoshi further claims that retail traders most likely purchased Bitcoin at the peak of the latest uptrend in BTC, and thus, they are more likely to face a greater risk of losses in the market and would be desperate to sell their holdings after experiencing panic at the current price movements.
The analyst claims, that though there are many who insist that they purchased Bitcoin at the bottom, exchanges have observed maximum purchases when Bitcoin was at $24,000.
Further, Pentoshi points out that the flagship currency is now selling below the 200-weekly moving average, which indicates that it has reached the bottom in its earlier trading cycles.
At the time of publication, Bitcoin is trading at $21,435 whereas the 200-week moving average is selling above the $23,000 range
Next, the analyst talks about the second largest cryptocurrency by market cap, Ethereum. He alerts the traders that Ethereum is trading below its important resistance area, which indicates that there will be a massive bearish pull soon.
At the time of writing, Ethereum is selling at $1,635, after a slight push of 2.49% in the last 24hrs.