Bitcoin sharply dropped after nearing $18,500 on Binance and Coinbase, but top analysts predict institutional investors will buy the dip.

The price of Bitcoin (BTC) dropped sharply after approaching $18,500 on Binance and Coinbase. The plunge took place as large sell orders were spotted on both spot and futures exchanges.

As Cointelegraph previously reported, traders anticipated a pullback as the price of BTC neared the $18,000 to $19,000 resistance zone. Upon its first retest of the area in nearly three years, the market saw a strong reaction.

Bitcoin confirms $18,500 as a key near-term resistance area

There are two main reasons why Bitcoin saw a swift drop near $18,500, and this caused other cryptocurrencies like Ether (ETH) to correct even harder.

First, the $18,500 level remains the biggest resistance level before a new all-time high above $20,000. Hence, it is a key area of interest for sellers to defend, as breaching $18,500 would raise the chances of a broader rally.

Second, an overwhelming majority of Bitcoin addresses are profitable as BTC tests an important resistance area. According to IntoTheBlock, 99% of BTC addresses are now in a state of profit. This raises the probability of a profit-taking-induced pullback.

Based on BTC’s recovery in the past two hours, there is a high probability that dips will be aggressively bought. Following the initial drop to $17,214 on Binance, Bitcoin immediately recovered above $17,600.

The hourly chart of Bitcoin shows that the 20-day moving average hovers at $17,586. As such, if BTC remains comfortably above that level, the likelihood of a prolonged recovery increases…CLICK for complete article