- Yesterday, the Bitcoin price fell by $1,500 and briefly dropped again to below $10,000.
- Technical analysts currently see the $9,600 level as a very crucial support for Bitcoin to maintain its bullish momentum.
After Bitcoin had traded at approximately $11,500 yesterday (around 8:00 UTC), a bloody sell-off happened in the hours that followed, which pushed the price below $10,000 around 24:00 UTC, to $9,989 on Bitstamp, for a short time. Since then, the Bitcoin price has recovered somewhat and stands at USD 10,298 at the time of writing.
Reasons for the crash of the Bitcoin price
As always, the causes of the crash can of course only be speculated. However, there are two theories currently circulating in the crypto community that are receiving strong support. One of the reasons is the raid carried out on September 2 against one of the largest South Korean crypto exchanges, Bithumb.
As part of the action by the Seoul Metropolitan Police Agency, the President of Bithumb Holdings and Bithumb Korea, Lee Jung Hoon, was arrested on suspicion of an illegal pre-sale of the BXA token. The news of this may have caused great uncertainty among investors in the important South Korean market.
Furthermore, a look at the equity market and the precious metals market shows that both have also experienced a strong correction. As has been seen on several occasions in the past, the correlation with both markets could therefore also have been a strong stimulus for BTC. In addition, the US dollar has experienced an upswing in the past few days, which contradicts the aggressive downward trend of the past few months.
It therefore appears that the price action in the Bitcoin market is due to the movement of the US dollar. In recent months, the movements of the Bitcoin price has been strongly influenced by the US Dollar on several occasions. The dollar, which is currently recovering, may therefore have caused the Bitcoin market, but also the stock and gold markets to slide.
What do analysts expect for the Bitcoin market?
In his latest tweet, renowned analyst Josh Rager referred to the still open gap in CME Bitcoin Futures. As CNF has reported several times, the Bitcoin price tends to close the “gaps” that arise on the CME outside trading hours. As Rager showed with the chart below, the currently open gap is between USD 9,665 and USD 9,925 after the massive rise at the end of July. According to Rager, it is possible that the “CME Gap” may have to be closed first:
If this CME Bitcoin futures gap needs to be filled than I say get it over with – would be okay with seeing the potential price action play out.
I’m also cool if whales just push price back up from here and never bother with filling the meme gap.
Another respected analyst on Twitter, Byzantine General, also referred to this price level. According to the trader, USD 9,600 is a crucial support for the Bitcoin price, as this is where the last massive rally began, and where the CME gap and EMA200 are in the daily chart:
Before I cry myself to sleep I will leave you with this. We are nearing bitcoin’s most important support level I would say.
9600 was the base before final lift off + CME gap + 200 EMA. Must hold! (could wick into the POC at 9250).
On the other hand, the analyst “Dave the Wave” explained that the fact that Bitcoin is losing some momentum is not a bad thing. If Bitcoin corrects now, this could mean a much healthier rallye in the long run. Dave the Wave referred to the MACD (Moving Average Convergence/Divergence) on a monthly basis, which has far less momentum behind it than in previous cycles. The analyst showed the chart below comparing the last cycles and explained that this signals a lengthened cycle.
On track for a lengthened cycle, not to mention a diminished return, which is all good for price discovery/ capitalization/ store of value.