by Viko

Last week has been a disaster for Bitcoin. It plunged more than $2000 and the failure of BAKKT futures has been given the majority of the credits for this fall. BitMEX was also partially blamed for executing margin calls. Investors selling their Long positions in a falling bitcoin market pushed the market further down to $8100. The technical indicators kept showing terrible predictions throughout the week. The most dismaying point came on Sept 24 when which came with a sudden increase in trading volume and but a heavy fall in BTC prices. It is clearly visible that the bear powers and sellers were muscly dominant throughout the week. However, many analysts are convinced that as long as the fundamentals and long-term market structure stay intact, Bitcoin’s pullback is a sure shot event after the corrections. Bitcoin price is trading in a downtrend below $9,000 against the US Dollar. BTC is likely to test the $7,500 support or $7,200 before a substantial recovery. Below we analyse how Bitcoin broke many support and resistance levels while showing this downfall.

BTC/USD pair broke many supports near $9,500 and $9,000 to enter an extremely bearish zone. Moreover, there was a close below $9,000 slightly below the 20 simple moving average (4-hours). Finally, the price broke the $8,000 support and traded near $7,742 which is a new low since June 2019. The bearish zone had two close $8,750 and $9,000 resistance levels. There seemed chances of more downsides below $7,850 and $7,750 and BTC touched these prices in the span of 48 hours. Once the current wave is complete near $7,500 or $7,200, the price could start a strong recovery by at least $3000. If there is an upside break above $8,300 and $8,400, the price could recover further by another $500-$600. The main resistance on the upside is near the $8,750 level. A successful close above $8,800 and a follow-through above $9,000 is needed for a strong recovery in bitcoin in the near term. However, the upward move is facing resistance near the $8,200 level (the previous support). Additionally, the 50% Fib retracement level of the recent decline from the $8,646 high to $7,736 low is capping upsides. BTC needs to break this cap to produce an optimistic sentiment which may bring back the bullish and buying power back to its feet. Therefore, an upside break above $8,100 and $8,200 is needed for a decent recovery.

On the downside, an initial support is near the $7,900 and $7,850 levels. If there is a downside break below the $7,850 support, the price could break the last swing low and continue lower. The main target for the bears could be $7,500. If there are more downsides, the price may perhaps test the $7,200 level. Any further losses are likely to open the doors for a sharp decline towards the $7,500 support area in the near term. If the bulls fail to protect $7,500, the price could tumble towards the $7,000 support and then below $6500. Looking ahead, current support is based off the 200-day moving average around $8,300, before a similar set of early-mid June lows near $7,500 come into play. The worry for holders of Bitcoin is that a full measured move of the descending wedge could see BTC hit as low as early-mid $4000s. This is a highly unlikely event but in these markets, a spark is enough to destroy the forests. The RSI is in deeply oversold territory, which demonstrates that short-term selling has been overdone and a pullback is likely. Were BAKKT futures responsible for this short-term selling? Possibly yes! However, it is advisable to not buy in a falling market because it is difficult to predict where the decline will end and due to this, a logical stop loss cannot be maintained. These corrections have become a quarterly event for BTC but display of such massive volatility raises concerns in the buildings of SEC to reconsider ETF’s rollout.

Altcoin’s prices stick like gum to BTC whenever ts prices drop. All the top 15 altcoins based on marketcap showed a drop of atleast 10% in their prices in which BCH and EOS had to face a hard knock. BCH and DASH were the biggest losers in this list. Total market capitalization settled just $200 billion where it was in mid-May before the rally gathered momentum. During this break, BTC has gained dominance of close to 70% after dropping to 55% during the bullish time zones. Altcoins are diminishing at such a rate that many may never recover. Ethereum almost looked like it was about to move independently but still no news on its progress or upcoming features to improve scalability has been heard. Litecoin has dropped 62% to $55 in 3 months and same stands for Binance coin. Upcoming week can be crucial for Cryptocurrency as a whole to set a direction of recovery or loss for the next 2 months. The bulls have to get back to intense work to push the market back as the market can’t stay always dependent upon institutional investors every time.

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