Bitcoin Tanks as Expected
BTC/USD: Price: $8,000 sats | MCAP: $145 Billion | Maximum Gain: -
Why we were intrigued:
Bitcoin has dropped by more than $2,000 this week, catching most investors by surprise.
The top cryptocurrency is currently trading at $8,000 – representing a 20 percent drop on a week-to-date basis. Prices hit a low of $7,734 on Bitstamp yesterday.
With key non-price metrics like the hash rate hitting record highs earlier this month, most experts were calling for a strong move to the higher side.
Technical studies, however, were calling a big sell-off. Notably, on Monday, the MACD histogram – an indicator used to identify trend reversals and gauge trend strength – was reporting strongest bearish bias in nine months.
CoinDesk on Monday reported about the bearish developments on technical charts and warned readers about a drop to $9,000. On that day, BTC was trading around $10,000.
As anticipated, the cryptocurrency fell to $9,000 on Tuesday and extended the drop to $7,734 on Thursday.
The 11.83 percent drop seen on Tuesday was the fourth biggest single-day drop of 2019.
Although technical analysis did point to a downside move, the speed with which the sell-off occurred was unexpected. The bearish move was likely exacerbated by the long squeeze on BitMex.
As of now, BTC is changing hands just below $8,000 on Bitstamp. Technical indicators on intraday and daily charts are oversold conditions.
So, the cryptocurrency may test the former support-turned-resistance of the 200-day moving average (MA), currently at $8,352. Corrective rallies, if any, will likely be short-lived, as longer duration charts have turned bearish.
Read:Bitcoin Approaching Biggest Weekly Price Loss of 2019
Analysis
The Result
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