Bitcoin Bulls in Danger as Price Drops $500 in Minutes Under $10K
Story by: Horus Hughes
For the past few days, the price of Bitcoin (BTC) has been hovering above the 20 Moving Average (MA) and drawing closer to the moving average as volume continued to taper off and lower highs were set each day.
Crypto Market Data Source: Coin360
The digital asset began to look bearish on multiple time frames and it seemed that a downward move was more likely than any other outcome. Once the 12 Exponential Moving Average (EMA) dropped below the 26-EMA on Sept. 16, aggressive intraday traders correctly predicted a double bottom bounce at $10,075.
BTC/USD 6hr Chart Source: TradingView
As this price was hit for a third time on Wednesday amidst the continuation of lower highs, a bearish breakdown was on the cards.
Surely, many traders are panicking given that the Bitcoin is fast approaching the termination point of the descending wedge. Everyone is expecting volatility and fingers are crossed in hopes Bitcoin will make an explosive upside move, which — when taking a view of the bigger picture — is certainly not off the table.
BTC/USD Daily Chart Source: TradingView
The most recent drop brought Bitcoin price right to the 111 Day Moving Average (DMA), a point that has reliably functioned as a bounce point since Apr. 2. The 111 DMA lines up with the $9,600 support and a drop below this point brings BTC closer to exiting the base of the descending wedge at $9,385. This level has also functioned as a support and bounce point for Bitcoin since July 16.
The pullback to the 111 DMA also lines up with the lower Bollinger Band arm and traders will note that the VPVR shows diminished demand below $9,500 until about $8,800. A drop below $9,300 would draw concern as there is minimal purchasing demand until below $8,600.
BTC/USD Daily Chart Source: TradingView
Macro trumps micro when it comes to Bitcoin investing
Bitcoin Golden Ratio creator Philip Swift recently advised traders to keep a hawk’s eye on Bitcoin’s historical volatility, which is dropping precipitously at the moment. Swift tweeted:
“It’s now very possible that BTC just goes sideways for a while now. If that scenario plays out, then it is worth keeping an eye on Historical volatility — currently dropping quickly. It would present a lovely long position trade opportunity when it drops down to the green box.”
Original story: https://cointelegraph.com/news/bitcoin-bulls-in-danger-as-price-drops-500-in-minutes-back-under-10k
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