The Bitcoin price collapsed below $10,000 on Sunday night in yet another stormy weekend session for the world’s largest cryptocurrency. Bitcoin briefly hit $9909 on Coinbase, marking an 13 percent drop in 24 hours.
The fall cements a strong 28 percent retracement from this year’s high. Technical indicators suggest BTC may still have room to fall in the short-term. In the long-term, however, this may be one of the last times we ever see bitcoin below $10,000.
The bears appear to have taken control of the market, forcing bitcoin back below the psychological price barrier of $10k. But the selling might not be over yet. Trader Josh Rager believes the selling pressure could force BTC into the $8,000s before it recovers. In his Telegram channel, he said he was now looking to enter short positions.
“I’ll likely be looking to short any rally with my eyes set on low $9ks”
Although selling pressure will continue, we could see a local bottom forming soon, according to trader Alex Krüger. He sees oversold indicators on the 4-hour chart, which historically results in a bounce upwards for bitcoin.
“In the last 365 days it has triggered 9 times and has always marked a local bottom (not counting cases in which signals fired consecutively).”
As Kruger points out, historical performance doesn’t guarantee the future, and the oversold indicators are not yet flashing on the shorter-term charts.
As CCN.com analyst Kiril Nikolaev wrote, bitcoin’s latest pullback may be the last opportunity to buy the dip before the market roars back to all-time highs. Nikolaev sees a “bottom picker” target of $9,000 where buyers will step in with large volume.
Although the dip is severe, it’s nothing we haven’t seen before. In the 2016-17 bull market, we saw nine 30 percent pullbacks on the journey to record highs.
Various mainstream news outlets claim that Trump’s now infamous bitcoin tweet triggered Sunday’s collapse. But that’s unlikely to be a major factor. The bitcoin price actually climbed in the hours after Trump’s tweet as the community generally saw it as a bullish sign.
Almost all the selling pressure came in the final hours of Sunday night. It suggests that bitcoin whales made a conscious attempt to suppress the price below key weekly resistance levels. Brace for steeper falls in the coming week, but don’t panic yet.
Last modified: March 4, 2021 2:38 PM