On September 3, the prices of Bitcoin (BTC), the S&P 500 Index, and gold all fell at the same time. After the decline, market sentiment remained cautiously negative.
Two factors could cause Bitcoin to plummet by more than 8% that day. First, miners sold an unusually large amount of BTC in a short period; second, the US dollar index has begun to rebound from a key support zone for many years.
Analysts also attributed the fall in gold to the appreciation of the dollar. The European Central Bank’s warning against the euro’s surge has made investors cautious about the euro. Changes in investor confidence pushed up the U.S. dollar further, causing gold to plummet.
The fall in the S&P 500 index may be a coincidence because before this, large technology companies have sold aggressively.
After Bitcoin’s sharp drop, people’s views on Bitcoin are still mixed. Some investors said that Bitcoin may stabilize above $10,500, and the bullish market will continue.
Others hinted that considering the strength of the correction in a key area, a mid-term peak is possible. An anonymous trader named “DonAlt” said:
We are likely to put a mid-term top here. Recovering $11,500 before the weekend, I think this idea is empty, but before then, I think this structure will become a beautiful top.
Bitcoin’s sharp decline from $12,000 to $10,500 indicates that $12,000 to $12,500 is a strong resistance range, and BTC is facing the risk of a head and shoulders pattern on a higher time frame.
Technically speaking, Bitcoin fell from $11,462 to $10,460 within 24 hours, increasing the possibility of a more substantial correction. This is because BTC traced its earnings for 31 days through one candle a day.
In an interview, Simon Peters, an analyst of eToro crypto assets, said that the bullish market structure has not changed. Therefore, before Bitcoin falls below $10,000, technical indicators indicate that a large-scale correction is impossible. Peters said:
As support for the entire August, the $11,300 level has now been broken, and Bitcoin may still have a long way to go. We can now expect to test $10,000 again as a new bottom, which may also coincide with the 200-day moving average (exponential moving average). From a technical point of view, this may support price movements and prevent prices from falling further.
Since 2017, recent months have been the longest time Bitcoin has remained above $10,000. Another variable that may prevent further downtrends is that buyers leave the market and enter the $10,000 zone.
Peters believes that the recent pullback may attract buyers in the short term, which is a glimmer of hope. There is a large number of funds present, especially in the stable coins market.
There are many potential reasons for this sell-off, the most important of which is the sell-off by miners. If there is a silver lining, it is that the price of Bitcoin has fallen back to $10,000, which is likely to attract some bullish people who have been on the scene to finally invest in Bitcoin.