Bitcoin price smashed the $9,500 support on February 25 after repeated tests and accelerated towards $9,100, marking the second day of losses amidst fears of the coronavirus spreading to more countries.
Bitcoin price smashed the $9,500 support on February 25 after repeated tests and accelerated towards $9,100. That marked the second day of losses as global equities markets steeply corrected on the fears of the coronavirus spreading to more countries. As the price plunged violently, traders in the Bitcoin market liquidated $41 million in long positions within a few minutes.
At the moment of writing, BTC price is $9.190.
Currently, BTC price is still exploring the depth of the rabbit holes, with sellers’ confidence levels incredibly high. Last week’s support at $9,300 failed to stop the rejuvenated bears with BTC/USD registering an intraday low at around $9,090.
The price is down over 3.5% for the past 24 hours as the Asian session on February 26 comes to a close. Trials to rise back up have hit a significant snag at $9,200. But, the flagship token seems to be consolidating around these levels awaiting the next price action. For now, the trend line appears to be inclined to the south, while the volatility levels are significantly high.
Could this be a start of a steeper drop; or was it just a test of the supports before bitcoin explodes higher?
Bitcoin Price amid Coronavirus: Technical Analysis
According to various indicators, BTC/USD appears to be under high pressure and may dive further below the critical $9,000 support. At this moment, the Relative Strength Index (RSI) downward slope is perched within the oversold region, which doubles down on the increased selling pressure.
Also, the price is trading under the moving averages where the 50 SMA is exerting pressure at $9,563.70 on the hourly chart. On the other hand, the 100 SMA is exerting pressure at $9,668. The apparent and increasing gap between these two moving averages indicates that the sellers may stay longer in control.
Many always believe that it gets darker just before dawn, and the Bitcoin proponents think that the current declines may soon lead to a rally that will likely explode past $10,000. Nevertheless, the rally will highly depend on the ability of the double bottom pattern to impact the markets. This phenomenon is described as a classical technical analysis.
By description, a double-bottom pattern is a reversal pattern that usually breaks an extended downtrend, in turn, enabling the bulls to take over the controls of the market as the sellers lose traction. Several of these regions likely to develop selling zones during recovery include $9,200, $9,400, $9,600 and $9,800.
Tweezer Tops Show Supports Turning into Resistance
The price plummeted below the crucial support of $9,450-$9,400. Resembling the February 18-19 drop from $10,250 to $9,478, the latest decline was also ushered in by a tweezer top candlestick pattern on the daily chart.
Currently, Bitcoin price found support at the February 4 price of $9,089 and bounced back towards $9,200. Below $9,089, the next support level is found at the 200-day moving average. That level is also aligned with a high volume VPVR node at $8,800. Such a drop will erase 16% of the 21% gain that Bitcoin made since surging from $8,327 to reach a local high at around $10,500 on February 13.
Crypto vlogger Ivan Liljeqvist (a.ka. Ivan on Tech), believes that there could be more pain in store for the Bitcoin bulls. That pain will continue if a bearish CME gap at $8,500 ends up being filled. He stated:
“There is still a gap, and there is still potential that we go there. It’s at $8,500.”
Coronavirus Thumps Bitcoin Price
Despite the 7.25% drop in the past two days, it is still unclear whether the pullback in Bitcoin price is technical or primarily caused by corrections in the traditional markets arising from the coronavirus fears.
Although some analysts and commentators are convinced that a sharp bearish reversal is imminent, others think that Bitcoin and the altcoin markets had reached the overbought zones after the recent multi-week surge that saw BTC price explode from $6,400 to $10,500.
Traders Seeking to Buy Lower with Halving Event Approaching
Some analysts long believed that 10% or bigger pullback was needed for the cryptos to retest their supports. During these retests, traders seek to book profits before entering the next bullish leg.
Thus, the current uptrend seems intact despite the short-term bearish conditions. Previous reports suggest that these bearish conditions resulted from crypto whales capitalizing on the many leveraged longs. Also, the overbought conditions existing within the market played a role.
The BTC price remains constrained between $9,350 and $9,800. Notably, each of the previous support levels has turned into resistance. Currently, the absence of purchasing volume indicates that traders are not convinced that the latest drop is a ‘buy the dip’ opportunity.
If an oversold bounce happens, BTC price may push the Bollinger Bands moving average higher. The moving average is currently located at $9,666 higher. However, the previous support at $9,650 may turn into a tough resistance level.
The illustrations were provided by Depositphotos.com
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