Bitcoin (BTC), S&P 500 and gold prices all fell simultaneously on September 3. Market sentiment remains cautiously negative after the fall.
Two factors likely caused Bitcoin to drop more than 8% on the day. First, the miners sold an unusually large amount of Bitcoin in a short time. Second, the US dollar index is starting to recover from the most important multi-year support.
Analysts also link the decline in gold to the strength of the US dollar. The European Central Bank’s warning about the euro’s growth has caused investors to question the euro. The change in investor confidence pushed the dollar further, contributing to gold’s decline.
The drop in the S&P 500 could have been accidental, as the drop came after a strong sell off from the big tech companies.
What’s next for Bitcoin?
Sentiment over Bitcoin remains mixed after the big drop. Some investors are saying that BTC is likely to settle above $ 10,500 and still be making gains.
Others have suggested the possibility of a midway peak given the intensity of the retreat in the main region. A merchant pseudonym known as Donalt said:
“There is a real possibility that we put a midway summit here. I count about $ 11,500 by the end of the week, and I’ll call that idea invalid, but until then, I think this structure is going to be a great top.”
Bitcoin’s sharp drop from $ 12,000 to under $ 10,500 shows that $ 12,000 to $ 12,500 is a strong resistance area, and that Bitcoin is risking head and shoulders in higher time frames.
Technically, from $ 11,462 to $ 10,460 in a single 24-hour period, bitcoins increase the chances of a deeper withdrawal. This is because BTC regained profits in 31 days in one day light.
Speaking to Cointelegraph, eToro analyst Simon Peters said the bullish market structure has not changed. As such, until BTC drops below $ 10,000, the specifications indicate a massive correction is unlikely. Peters said:
“Maintained throughout August in support, the $ 11300 level has been broken and Bitcoin still has a long way to go. We can now expect to test $ 10,000 again as a new low, which might also coincide with the 200-day moving average (exponential) average. From a technical point of view, this can support price action and prevent further price declines.
The past few months have been the longest period in which Bitcoin has stayed above $ 10,000 since 2017. Another variable that could prevent further downturns is the entry of third-party buyers into the $ 10,000 market.
It is a silver lining
On the positive side, Peters said the recent pullback may tempt buyers in the near future. There is substantial capital on margin, especially in the stablecoin market.
There are a number of potential reasons for selling, the most important of which is mining. If there is a better hope, it is that the drop to $ 10,000 may entice some bulls who were on the sidelines to eventually invest in bitcoin. “