The weekend didn’t bring any reprieve for digital currencies, rather resulted in bitcoin falling to $9,850 briefly before going back above the $10,000 level.
The good thing for bitcoin is that the key psychological level of $10k, although broken a few times, has managed to hold the fort.
While bitcoin is keeping above $10,000 for the most part, for now, Ether, which has been leading this rally, lost nearly 35% of its value last week.
Ether’s loss resulted in the DeFi’s TVL declining by $2 billion, while a whopping $78 billion were wiped out from the overall crypto market. Su Zhu, CEO of Three Arrows Capital said,
“Eth 320 as a bottom made sense and played out; btc i am actually flabbergasted by the strength shown at 10k and prob means 100k is more likely than 5k at this stage.”
At the time of writing, BTC/USD has been trading around $10,150, with ‘real’ volume still low at just $1.2 billion. Meanwhile, Tether is currently recording over 3x of bitcoin’s volume.
In late July, the flagship cryptocurrency broke the $9,000 – $10,000 range in which bitcoin traded between May and July to form a new higher range of $11,000 to $12,000.
The current situation, however, doesn’t bring any confidence to bulls, as per analyst DonAlt, who has been bearish on BTC for quite some time.
He is “full-blown beartard” on bitcoin until the digital asset has a significant daily close above $11,200. Such an upward move would invalidate his bearish stance, but if not, he is looking for $8,000 or even $6,000 – $7,000.
This is a chart for the bulls.
Still just a bullish retest for now, pretty much just have to hold above (or around) $10k for the next 20 days and it'll all be ok.
Lose it and there is a really nice support level down at $7400 to look forward to. pic.twitter.com/xVWmn0fRlT
— DonAlt (@CryptoDonAlt) September 7, 2020
Already, the last week which saw the digital currency briefly going to $12,000, bitcoin has fallen 17.5%. But a move to about $7,000 would put the pullback into the 40% drop category, which will be in-line with the previous pullback of 30%-40% recorded during the last bull cycle to the top.
As such, on-chain analyst Willy Woo says while “Local on-chain switching bullish (looking at the next few weeks out),” he is “not calling this has bottomed,” although it may have.
However, he also says, “it's not a bad time to buy back in.”
A lot of Bitcoin’s next move depends on the stock market. Last week, after hitting a new all-time high, they experienced a correction, and a sharp reversal in tech stocks saw bitcoin responding as well.
However, unlike the crypto market, the stock market will remain closed on the occasion of Labor Day on Monday. Although stocks reversed some of their losses on Friday, markets are expected to still be choppy after investors return from the long weekend, which means bitcoin still remains in danger.