In a sudden shift from several days of an upward trend, Bitcoin's price has dropped below $7,000, sliding from its $7,100-$7,400 consolidation level to a recent lower point of $6,840, marking a significant 7.5% decline.
Heralding a recent 100% increase in value after recovering from the 'Black Thursday' slump, Bitcoin now faces a downward adjustment. “Black Thursday” bottom Even as the stock market showcases a robust bounce back, undeterred by the ongoing coronavirus crisis and soaring unemployment statistics, Bitcoin faces a correction.
This pullback didn’t come as a surprise: a warning signal had been highlighted on Wednesday when the Tom Demark Sequential alerted a sell '9' candle for several cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Tezos.
The concept of the '9' candle often signals market turnarounds according to the time-based sequential indicator. For instance, 9 candles marked Bitcoin's December 2019 low of $6,400 and the local peak of $10,500 earlier this year in February.
Furthermore, traders noticed that BTC’s rally was rejecting at two key levels simultaneously: the 50-day simple moving average and a horizontal resistance of $7,300, formed in October when BTC crashed to this very level.
Bitcoin Forks Hit Especially Hard
Bitcoin's forks, Bitcoin Cash and Bitcoin Satoshi’s Vision, have particularly suffered in this correction, with declines nearly thrice that of Bitcoin itself from their recent highs.
The lag seen with BSV and BCH likely ties back to their block reward halving events, slashing the coins produced per block by half, down from 12.5 to 6.25.
BCH and BSV recently underwent their halving events due to a glitch in block difficulty adjustment at the time of their forks, which occurred within the past two days.
According to data from Blockchair Following the halving, both BCH and BSV witnessed over a 50% drop in hash rates, pushing tight-budget miners to either power down their equipment or seek other mining opportunities.
With this, Crypto51.app A site tracking the expenses involved in performing a '51% attack' on a blockchain reveals the cost to compromise the Bitcoin Cash and Bitcoin Satoshi’s Vision networks has sharply declined.
It seems there has been significant selling of BCH and BSV by miners to maintain financial stability, possibly due to lingering doubts about the security of these Bitcoin offshoots.
What’s Next for the Market?
Regrettably for bullish traders, the trend suggests more downturns in the cryptocurrency market.
Tyler D. Coates, a recognized figure in technical analysis and a notable Bitcoin trader,remarked warns that Bitcoin is nearing a breakdown of a bullish trendline that has been intact since the March bottoms. If broken, it might see the price returning to mid-$5,000s.
$BTC suggests a potential break in the bull trendline. Yet, this could be deceptive, as current levels remain above previous horizontal resistance and 4-hour EMAs. Maintaining support at $7K could lead to retesting $8.5K+, but a breakdown could target mid $5,000s. pic.twitter.com/iVkMoMl9UA
— Tyler D. Coates (alphαnalysis.io) (@Sawcruhteez) April 10, 2020
Coates' negative outlook finds resonance in the community, like one trader remarking that Bitcoin’s price action eerily mirrors the onset of the 2018 bear market.suggested Nonetheless, there's data indicating some investors are resisting cashing in from a potential short-term drop to
larger holders of Bitcoin, known as whales, continue to increase in number, reaching heights not seen in two years, reminiscent of the accumulation phase back in 2016. accumulate Bitcoin for the long term in hopes of a bull run.
For instance, crypto analytics provider Glassnode observed on April 9th that the number of Bitcoin wallets with over 1,000 coins has seen large growth since December, rising from 1,750 then to 1,840. Apparently, these levels have not been seen since the last block reward halving for Bitcoin in 2016.
The number of $BTC This becomes more intriguing when we juxtapose it with the prior
While not a definitive predictor of future market trends, according to Glassnode, #Bitcoin halving.
Read more in The Week On-Chain ???? https://t.co/CJOl6xqyyX pic.twitter.com/BE9N4reNcD
— glassnode (@glassnode) April 9, 2020
this development suggests something promising, hinting at potential growth on the horizon: sees “The count of entities holding at least 1000 BTC increased just before last month's market dip and accelerated throughout the crash and beyond. This points toward significant market participants accumulating BTC, which bodes well for optimism.”
As a writer who has tracked the crypto scene since 2013, I've shared my insights and conducted interviews featured in top industry outlets like LongHash, NewsBTC, and Decrypt. When not writing, I contribute to the EXODUS team at HTC, a Taiwanese tech corporation, and personally hold a modest amount of Bitcoin. Reach out to me at [email protected]
