The cryptic commentator known as Altcoin Sherpa imparted his wisdom on social media, elaborating on how to discern eroding support levels within the Bitcoin BTC/USD trading sphere.

Developments: Sherpa likens the concept to a ball dropping, where the first rebound is the strongest. He mentions that the initial bounce is usually the most robust, followed by a series of diminishing rebounds, citing the case of Bitcoin’s once deemed “indestructible” $6,000 mark back in 2018.

Further acknowledging the input of trader CryptoCred, Sherpa references the principle of “first test, best test” to underscore the significance of a support level’s initial interaction. This strongest initial bounce, he suggests, results from a mix of pending orders and unexpectedly trapped short sellers.

Despite this, as the support level is repeatedly challenged, the reactions are likely to diminish. Extended views unveil an inherently bullish market, suggesting even a dramatic retracement to $40,000 wouldn’t necessarily negate the overarching bullish trend, as per Altcoin Sherpa’s analysis.

“As the price tests the support more frequently, previous purchasers get their orders executed, resulting in diminishing support levels,” he observes, indicating that this may lead to consolidation at the support level before a possible downtrend emerges.

Further Reading: Raoul Pal Foresees Cryptocurrencies Adopting ‘Banana Zone’ Soon With A Market Cap Hitting $100 Trillion In The Next Decade

Significance: The bouncing ball theory is mainly relevant in times of liquidations identified by long wicks and is more prevalent in volatile circumstances. Nonetheless, Altcoin Sherpa reminds us that contextual cues are of utmost importance.

This model applies better to sideways markets and downward trends. In contrast, in upward trends, there may be revisits to lower levels before witnessing a formidable climb, as was witnessed in Bitcoin’s surge to $60,000 back in 2021.

Bitcoin’s current stance is one of indecision, lacking distinct direction in the shorter timeframes. Looking forward, Altcoin Sherpa believes that bullish triggers such as the imminent elections and a recovering macroeconomic landscape argue in favor of maintaining an optimistic outlook on Bitcoin.

Traders are encouraged to steel themselves for interim volatility and a potential dip in prices, with Sherpa advising against hasty selling and to keep an eye on the long-term view.

Up Next: The role of Bitcoin as an institutional investment will be a topic of exploration at the impending Benzinga Future of Digital Assets symposium on Nov. 19.

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