- Bitcoin plunged 18.79% after closing above $ 10,000 on Friday night.
- The cryptocurrency found a short-term support area above $ 8,000, which prompted traders to predict a new $ 10,000 test.
- But a contradictory technical indicator sees Bitcoin continuing its bearish correction.
The euphoria of "Bitcoin Halving" helped the cryptocurrency jump from its mid-March low of $ 3,858 to a high of $ 10,079 this Friday. But the so-called bullish event failed to convince traders to keep the price above the latest market peak.
The benchmark cryptocurrency fell 18.79% less than a week after it closed above $ 10,000. Traders have apparently decided to "sell the top" to gain short-term gains, causing prices to fall sharply. Data provided by CryptoDiffer showed that exchanges settled around $ 1.22 billion in bitcoin positions on May 10 alone.
$ 1.22 billion settled on Bitcoin exchanges | Source: CryptoDiffer
The liquidations have cut a hole in the balloon inflated with the price of Bitcoin. BTC / USD rebounded earlier in the New York session on Monday, the day of halving, after Paul Tudor Jones
, a multi-billion dollar hedge fund manager, told CNBC about holding 1-2% of bitcoins in his $ 22 billion fund. However, the price dropped at the close.
Bitcoin 1D support
The downward correction over the weekend and the beginning of this week did not extend below $ 8,100, twice in a row. The price tested this level, once it led to a sharper decline above $ 9,100. But the bears have shown just as strong resistance, as they have kept the jump from thriving thanks to a price rebound.
BTCUSD recovers after testing $ 8,100 for support | Source: TradingView.com, Coinbase
The support level (blue) also coincided with the 200-day moving average of Bitcoin (orange), providing an additional layer of flooring to defend the prevailing bullish bias. Meanwhile, a long-term (darkened) downtrend line maintained an equally protective stance for bears.
But, according to the best analysts, Bitcoin has every reason to continue its uptrend. Macroeconomic factors, including open central bank stimulus packages and "halving", have led bulls to predict a seven-digit bitcoin scenario.
"Bitcoin could reach $ 115,212 in August 2021 based on the change in the stock-flow relationship in each semester" he said Dan Morehead, CEO of Pantera Capital, referring to a popular pricing model based on scarcity.
Short-term breakdown
Meanwhile, there are a number of frequent market risks that also engulf the Bitcoin market.
A new spike in the coronavirus pandemic, for example, could lead retail and institutional investors to give up their risky assets for money, as they did in March 2020. And according to the latest evidence, coronavirus cases emerge again in countries that reported having "flattened the curve".
Far from the basic accounts, the price of bitcoin could still plummet to $ 1,000 just due to technical sentiments. A popular but pseudonymous cryptocurrency trader made the prediction on Tuesday via a graph showing bitcoin trends in a bearish flag.
"Sometimes (the) price of bitcoin follows the simplest patterns," said the trader. "Here is a bearish flag targeting around $ 7,650, which also coincides with a high trading volume / support area and a 38.2% Fibonacci retracement level."
Photo of Muzammil Soorma in Unsplash
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