Bitcoin Price Looks for Support at $9500 as Bear Indicators Light Up


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Bitcoin Price Looks for Support at $9500 as Bear Indicators Light Up

Bitcoin price plunges by over $850 in less than hour liquidating over $126 million in longs on BitMEX alone. The overwhelming of long orders once again provides liquidity for whales for a massive drop through dominant selling.

Prominent derivatives trader, Hsaka notes after the plunge,

$BTC $120m (contracts) liquidations on that last hourly, causing OI to get back below a billion.

Hence, the bullish hysteria in the market seems to be blowing off. The price of Bitcoin [BTC] at 2: 15 hours UTC on 20th February 2020 is $9575.

btcusd four hour
BTC/USD 4-Hour Chart on Coinbase (TradingView)

Just after the drop derivatives and crypto trader, XC, tweeted,

…Daily below 95 is the bear goal rn. LTF wise looking for a (bearish) continuation setup. $BTC

Head and Shoulders Bear Pattern

While the drop is momentary, the bearish candle looks ugly on most time frames – leaning towards invalidating of the bullish market structure. The head and shoulders pattern forming on the chart is leaning towards target at $8750 upon confirmation.

Moreover, the 200-Day Moving Average is also at $8890, invalidation of this critical support might be flip the sentiments of the market completely.

btcusd 1-day chart
BTC/USD 1-Day Chart on Coinbase (TradingView)

The TD sequential on the daily is on a bearish count as well. According to Tone Vays, leading derivatives and crypto trader, the bulls market is looking weak with support levels to look at around $9000-$9100.

Nevertheless, until then the bulls are still in play. The price will look to test resistance around $9600-$9800 for consolidation in case bulls arrive again.

The flash drops are evidently brought due to orders on the derivatives market. Nevertheless, it is not manipulation, but more of game theory between high volume traders vs. majority of the market. Leading trade analyst, Jacob Canfield tweeted,

Bitcoin, while fundamentally is designed to go up over the ‘long’ term is currently being driven by derivative markets. Short term and mid term price trends caused by overleveraged traders can go any direction they want. What can’t be faked, is the decade long bullish trend

Do you think bull action will continue or price drops below $9000? Please share your views with us. 

Author: Nivesh Rustgi
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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Nivesh Rustgi 1180 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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