Bitcoin took a hit about 4 days ago when it first slumped below the $10k support level on Monday 23rd of September. Interestingly, it’s fall coincided with the launch of the bitcoin futures platform, Bakkt. This was the beginning of a new bearish movement in which bitcoin rapidly dropped to new monthly lows below $9.5k which later flung the price of bitcoin towards the $8k mark as of Tuesday, 24th September. At present, Bitcoin is trading at $7,932.90 having slumped by nearly 5.5%, within 24 hours.
Bitcoin Trades Below $8k
As against all indications, BTC broke the two major support levels at $8,500 and $8,000 marks respectively to establish a lower price below $8k. Now trading at $7,932.9 as seen on CoinMarketCap, BTC is currently looking to test the support level at the $7,500 mark area. Although BTC retained its market dominance at 68.23%, it’s market cap has to $142.74 billion.
Bitcoin’s Range-Bound Perception Trashed
Bitcoin was perceived to have become more range-bound recently. The top cryptocurrency had been trading between the $10k and $11k region for a few weeks and bitcoin price had recorded the longest range-bound stability within the last 4 months. As it was exciting to see that Bitcoin’s decreased volatility strengthened its use case as a currency, for traders, the news was not particularly something to rejoice about. Shortly after, the king crypto had begun to slip again towards the critical $10k support level, a point which analysts believe would cause another bearish cycle if broken.
How CME Futures Contracts’ Inbound Monthly Settlement Could Have Fanned The Bear Signals
As per a report by Coingape, the results of recent research which do not necessarily reveal the mechanisms involved in suspected price manipulation also pointed that the fact that CME settles its monthly futures contracts in USD makes it possible for speculators and traders to bet against the price of bitcoin. On a monthly basis, towards the settlements period, it is suspected that traders try to play the system by shorting bitcoin.
According to the report,
In the last year 2 years, from January 2018 up till August 2019, analysis shows that bitcoin price had recorded a downtrend ahead of CME futures contracts settlements in 15 out of the 20 months under review. According to the analysis, only 5 months (2018-2019: Apr, Sept., Dec., Mar., July) did bitcoin price rise ahead of such a settlement period. In the remaining months, bitcoin had fallen by an average of 2%.
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Staff writer at Coingape. Certified cryptocurrency expert and Blockchain journalist covering crypto market analysis and general Blockchain adoption and development.
You can follow me on Twitter at @ShonubiDare or reach out to me at dare[at]coingape.com