The price of Bitcoin (BTC), the S&P 500 index and gold fell simultaneously on September 3. Market sentiment remains cautiously negative after this fall.
It’s possible that two factors triggered Bitcoin’s sharp drop of more than 8% today. First, the miners sold unusually large amounts of BTC in a very short period. Second, the US dollar index began to recover from a key support area of several years.
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Analysts also attribute the fall in gold to the positive behavior of the U.S. dollar. The European Central Bank’s warning about the rising euro caused investors to become cautious about the euro. This change in investor confidence further boosted the dollar, contributing to the fall in the price of gold.
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The fall of the S&P 500 could be a simple coincidence, since the fall comes after a massive sale of the big technology companies.
What’s next for the price of Bitcoin?
Sentiment around Bitcoin after the big drop is still mixed. Some investors say that BTC will probably stabilize above USD 10,500 and see a continuation of the upward trend.
Others hinted at the possibility of a medium-term high, considering the intensity of the decline in a key area. A pseudonymous trader known as „DonAlt“ said:
„There is a real possibility that we will put a medium-term high here. We’ll recover towards $11,500 by the end of the week and I’ll call that a nil, but until then I think this structure would be a splendid high.
Bitcoin’s sharp drop from $12,000 to less than $10,500 shows us that the area between $12,000 and $12,500 is a strong resistance range and that BTC risks forming a head-and-shoulders pattern in longer time frames.
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In theory, Bitcoin’s drop from $11,462 to $10,460 in a single 24-hour period increases the chances of a deeper setback. This is because BTC lost 31 days of profit on a single daily candle.
Speaking to Cointelegraph, eToro’s cryptanalyst Simon Peters said that the market’s bullish structure remains intact. Therefore, until BTC falls below USD 10,000, technical analysts suggest that it seems unlikely that we will see a more pronounced correction. Peters said:
„Maintained as support during August, the USD 11,300 level has been broken, and Bitcoin may still have a long way to go. Now we can expect a new test of the USD 10,000 as a new low, which could also coincide with the 200-day EMA (exponential moving average). From a technical point of view, that could drive price action and prevent the price from falling even further.
The last few months have been the longest period of time that Bitcoin has stayed above $10,000 since 2017. Another variable that could prevent a further downward trend is buyers entering the market in the $10,000 area.
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