The bitcoin price has dropped by more than $600 within three minutes from $10,069 to $9,440 on July 27 in an abrupt pullback.
Against the U.S. dollar, at its lowest point on the day, the bitcoin price slipped by well over 7.5 percent to $9,333.
Throughout the past two weeks, the bitcoin price has shown relatively high volatility above key support levels, unable to break above strong resistance.
According to global markets analyst Alex Krüger, the bitcoin price has had important support levels at $11,300, $11,000, $10,800, $10,300, and $9,500 to defend and within a short time frame, those levels were broken down due to intensifying sell pressure.
Following the dip of the bitcoin price below $9,500, Krüger stated that the next target for bitcoin remains at the mid-$8,000 region, at the $8,500 to $8,600 range.
“The range is now breaking down. 8500-8600 is the next logical stop and first major buying area. Chart favors downside yet the upside is IMO considerably larger. Keep the big picture in mind,” he said.
Josh Rager, a cryptocurrency technical analyst, similarly suggested the possibility of bitcoin dropping below the $9,000 level in the near term, which has acted as a weekly support throughout the year.
“The ‘potential’ lower-high looks to be playing out with a price below $9,690. Eyeing price to make its way to sub $9K at the weekly support level to form a lower-low. Just trying to be fluid, not overly bearish as 4-digit BTC is still a gift,” said Rager.
The price movement of bitcoin has been largely technical since mid-July with no clear fundamental factors triggering a decline in sentiment around the cryptocurrency market.
The highly anticipated test launch of Bakkt was initiated without further delays and investment firms like Grayscale have reported a consistent inflow of institutional capital since early 2019.
However, there exists potential negative fundamental factors for the market such as the regulatory uncertainty in the U.S. market, which has been a key market for cryptocurrencies as an emerging asset class.
Circle, one of the biggest cryptocurrency companies in the global market, moved some of its operations outside of the U.S. following the remarks of Treasury Secretary Steve Mnuchin and U.S. President Donald Trump on cryptocurrencies.
When market makers are done catching the small fish as they did in 2018, they need a different game plan to go after the big fish. This would be the fishing equivalent of “chumming” which is considered illegal in most parts but when you are in the middle of nowhere there is no one stopping you. The risk is higher for market makers with this approach but so are the rewards. In this phase of the game, you cannot expect fair play because the stakes are too high for both sides. The way the price cut through the all-important $6,000 resistance zone to hunt the bears is a prime example of that.