Previously, regular commentator Josh Rager had eyed a break below $9,600 as a gateway to lower levels, with the potential for $9,000 to also fall.
Some had anticipated volatility continuing in the short term. On Twitter, the trader known as CryptoCohen sounded the alarm hours before the $800 losses.
“Could be a larger correction in play — could take a lot longer too — longer than many would expect/hope. But good things come to those who wait,” he summarized.
Bitcoin is extremely oversold as a result of the latest drop, with the relative strength index (RSI) plunging below 25. A textbook rebound should see bitcoin recover at least some of its early Saturday drop.
At current values, bitcoin has a total market capitalization of $168.5 billion. Its share of the overall market has dropped to around 64.5%. The so-called bitcoin dominance rate was as high as 67% earlier this month.
However, with bears in this much control and after a few nasty rejections each time Bitcoin price tried to reclaim highs, the bearish case has been given more probability in recent days. A break of $9,200 where BTC bounced previously would certainly send it to test resistance turned support lower.
The aforementioned slump also took the valuation of BTC below the Fibonacci resistance of 0.382 i.e $9441, which could later turn out to be a crucial turning point for the current trend. Consolidation in the lower range of $9000 or a breach below the same could indicate a more significant fall in the weeks to come.
Bitcoin, which seemed to trigger the drop, lost nearly $700 in a couple of minutes. Earlier in the day, the crypto king was trading in the highs of $10,150. The crash has seen the asset drop to trade below $9,500 at the time of writing this.
The $9,500 position has been a key support for the coin and holders will be hoping that it holds above it. Further losses would see the next key support in the $9,200 region which has been tested in the last few weeks.
In addition to CFTC, CME (Chicago Mercantile Exchange) is the second institutions available for US individuals and investors to involve in bitcoin futures contracts activity. Bitcoin futures traded at CME are derivative financial contracts that allow dealing parting to transact an underlying asset at a predetermined date in the future and for a certain price. CME offers cash-settled futures trading wherein users aren’t dealing with the real Bitcoin.
Spectators have yet to understand the cause of the volatility, as the cryptocurrency started today’s trading session with high energy, having moved up to the $10,000 support within an hour. At the time of writing, Bitcoin was trading at $9,400. Bitcoin’s weekend trading is typically characterized by volatility, as mentioned in yesterday’s BTC analysis.
The rest of the crypto market is also in the red, with major altcoins suffering significant losses between 2% to 6% on the day.
The total market cap is $261 billion | Bitcoin’s market cap is $168 billion | BTC dominance rate is 64.4%