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Bitcoin (BTC) Price Plummeted by $700, Markets are Oversold

As soon as Bitcoin dropped below the $10,600 level and failed to climb over heavy resistance, it demonstrated a steep fall to $10,068 within a span of minutes. According to some analysts, the drop could possibly signal a short term trend line breakdown if the asset fails to close above $10,200.

Even though yesterday we wrote of how some bull investors are convinced Bitcoin (BTC) will rise above 11K, that still hasn’t happened. Moreover, Bitcoin is falling and hasn’t stop since. At the time of writing it was 5.09% in fall to $10,176.94.

The BTC’s short term downside price movement could be technically generated by the constant trying of the largest cryptocurrency to excel an unusually hard resistance level at $10,900.

On August 20, when the Bitcoin price was floating around $10,700, some analysts were saying that short term performance of Bitcoin will be determined on the way it will react when faced resistance at $10,900.

Scott Melker of TexasWest Capital says a downside move in Bitcoin charts should not become a reason to panic and sell all your holdings. He claims investors should do nothing: neither sell nor buy – not until the market establishes a clear bias. However, he admitted that it has become difficult for both bears and bulls in a trend of uncertainty.

Josh Rager tweeted:

He also added that this drop could possibly warn of a short term trend line breakdown if it doesn’t close above $10,200.

“Bitcoin possibly just made it’s next lower high after rejecting of 20MA on daily and short term trend line breakdown. Currently bouncing off long term trend line and wanting to watch a close above $10,200.”

If the price fails to stay above the $10,000 support, it could come the $9,488 swing low. In can go even further with the price slumping below the $9,488 low and trade to a new monthly low.

On the other hand, if the upside correction would happen, the price could test the $10,400 and $10,500 resistance levels. In addition, the main resistance is near the $10,600 level and the 100 hourly simple moving average.

Be it as it may, some where pretty surprised by this steep fall that happened in just few minutes.

It was expected that, with the announcements of opening of Bakkt, a physically-settled Bitcoin futures market operated by ICE scheduled for September 23, the price of asset will rise.

However, most possible outcome of potential effect of Bakkt on the price movement of Bitcoin will be visible only after it happens and will depend on the actual demand by investors.

Some are afraid that mid June prices could repeat (BTC was trading for $9,300) but the sentiment has recently been pretty much changed, according to some metrics.

Let’s just mention so-called Fear & Greed Index, that tracks price moves based on whether investors are anxious to buy or sell. Right now, on a scale of 1 to 100, the index is at 11, representing extreme fear and suggesting oversold markets.

BTC As a Long-Term Safe Haven

A general partner at venture capital firm Blockchain Capital, Spencer Bogart, claims Bitcoin (BTC) could act as a safe haven in the long term. However, he has a insignificant view of how BTC price will play out regarding all the economic happenings.

He said:

“I think longer term Bitcoin will absolutely be a safe haven. I think that when you have looming risks of monetary devaluation, things like this, Bitcoin certainly looks very attractive. And I think that was a large driver of the recent run-up in price.”

On the other hand, he said he doesn’t believe Bitcoin will act nicely in the times of the economic crisis.

He added:

“When you think about really severe crises taking place, a liquidity crunch, another global financial crisis, I think that Bitcoin will struggle to do very well from a price perspective.”

In the other news, all major alternative cryptocurrencies in the likes of Ethereum (ETH), XRP, and Bitcoin Cash (BCH) dropped by a similar immensity as Bitcoin in the overnight pullout by around 7 to 10 percent against the U.S. dollar.


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