These 3 key factors are making traders think Bitcoin retests the $6,500 bottom

The Bitcoin price has dropped by around 18 percent in the last two weeks and traders are fearing a steep correction to occur in the short-term for three key reasons.

Up until late February, technical analysts were anticipating the bitcoin price to respect strong support levels found at $9,550.

The $9,550 level was a critical area for bitcoin to defend because it was support formed in October 2019, and was also a 0.615 Fibonacci level which typically acts as a point of reversal.

The bitcoin price plummeted through the $9,550 level swiftly after testing it the third time, liquidating hundreds of millions of dollars in long contracts in the margin trading market.

As the bitcoin price breaks down from the inverse head and shoulders structure, highly-regarded analysts like Pentarhudi, who successfully predicted several market cycles throughout the past three years, said that the $6,000 to $6,500 range is the likely next target.

For a long period of time, the funding rate of both Bitcoin and Ethereum remained above 0.1 percent on BitMEX, Binance Futures, and other major margin trading platforms.

In December 2018, the Bitcoin price proceeded to enter a severe bear market, dropping to as low as $3,150.

The practice, which is now prohibited in the stock market, was used to create inorganic demand for bitcoin to cause fear of missing out amongst retail traders.

Cryptocurrency trader Jacob Canfield said that $8,000 and $8,400 remain as two strong levels of support for bitcoin in the short-term.

Given the tendency of Bitcoin to see overextended movements to both the upside and downside, traders foresee the pullback resulting in a drop to the $6,000s once again.