Any asset that goes up by 65 percent in just a month needs to take a breather. Bitcoin is no exception and, after surging from $5,350 to a high of $9,000 in May, is due a correction.
Bitcoin Price Drops Under $8K
Bitcoin’s closing candle came in below $8,200 yesterday, which is a crucial level for maintaining support and remaining bullish in the short term. For the second time in a week another big dump has occurred resulting in another lower low. With most of yesterday hovering around $8,550, BTC price 00 fell through support and plunged 7 percent back to $8k.
Traders and analysts have eyed the $8,200 level as crucial for further bullish momentum. Any close below this today would likely result in a drop back to support in the mid $7,000s. Full time trader Josh Rager has noted that the huge volume spike could initiate a quick retest of resistance before things go south again;
People have asked if that was short term sell off and the price is heading back up. Due to the amount of volume, it’s more likely price has short term relief that can last hours or days before another push down to retest support. Price action isn’t a straight line.
People have asked if that was short term sell off and the price is heading back up
Due to the amount of volume, it's more likely price has short term relief that can last hours or days before another push down to retest support
Price action isn't a straight line 🙂 pic.twitter.com/FiTSsNO7SF
— Josh Rager
(@Josh_Rager) June 4, 2019
At the time of writing Bitcoin was trading just below $8,000 where there is currently strong support.
Volatility is up and moving averages are likely to come into play as key areas of support since prices are still way above most of them. Longtime trader ‘CryptoFibonacci’ has been analyzing the moving averages and notes that big price swings are coming;
Still one of my more favorite charts. All the moving averages are still providing support, but as said a while back, price would come back to retest. We are heading there now. Volatility is UP. Big price swings coming.
$BTC Daily moving average chart.
Still one of my more favorite charts. All the moving averages are still providing support, but as said a while back, price would come back to retest. We are heading there now. Volatility is UP. Big price swings coming. #BTC pic.twitter.com/IAKetw8igZ
— CryptoFibonacci (@CryptoFib) June 4, 2019
Crypto Markets Shed $25 Billion
Total market capitalization had been battered by almost $25 billion falling from over $276 billion down to $252 billion a couple of hours ago. Bitcoin’s retest of $8k has lifted things a little during Asian trading but whether it will remain there seems unlikely at the moment.
Altcoins have taken a beating as usual with a sea of red enveloping the charts this morning. Double-digit losses have hit Bitcoin Cash, EOS, Cardano, Tron, IOTA and NEO as weekly gains get wiped out in a few hours. If the 30 percent correction does materialize, prices are likely to return to early May levels when more accumulation will occur.
Will markets fall back 30 percent or can the momentum continue? Add your thoughts below.
Images via Shutterstock, Tradingview.com
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