Bitcoin [BTC] broke down in a frenzy on Tuesday as it tested lows around $8000. The break-out from the descending triangle quickly escalated the fear among traders holding a long position. About $500 million in long positions on Bitcoin was liquidated on BitMEX yesterday.
The price tested the break-out level at $9450 for a while before it plunged in a jiffy. Many traders expected a bounce at these levels.
Nevertheless, apart from the break-down due to technical indicators, there is no major adverse news affecting the market. However, as Joe Saz mentioned in Tone Vay’s trading Bitcoin update “half of trading is: biting the bullet,” traders liquidated long positions quickly.
The market went in haywire as Exchanges were seeing catching up the price trying to find support. Even the Coinbase price response was a lot slower. This can occur because of the lack of futures trading like on platforms like BitMEX and CME.
Bitcoin [BTC] broke tested lows below the 200-Day Moving Average, currently, around $8260. It will act as an essential support level in the near future. Analysts and derivatives traders like Mati Greenspan and Tone Vays paid immense importance to this level. The price is also shaping a death cross between the 50 and 128-Day Moving Average.
The price of Bitcoin [BTC] at 2: 30 hours UTC on 25th September 2019 is $8677. It is trading 10.8% lower on a daily scale. $8500 will is currently acting as an essential psychological level.
Josh Rager, a crypto-trader and analyst, tweeted,
$ If Bitcoin fails to break above the current level, we’ll get another retest of the support below – which has bounced once and could hold
But if this isn’t a bear trap I do see price heading down to low $7ks
Lots of buyer are waiting between $6180 & $6500
The spreads between the buy and sell orders are significant, and there is very little liquidity on the buy-side. However, the volatility has increased dramatically; the likely support and resistance are about $2000 apart.
Moreover, the bears seem to have control at the moment. From current levels, $7500-$7000 should see the re-entry of buyers with 50% of the descending triangle target.
Nevertheless, a bounce above $9000 is necessary to get green signal bullish indicators.
Do you think Bitcoin’s price will be able to current levels? Please share your views with us.
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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