Bitcoin plummets to $7700 after $9000 fakeout
Bitcoin began to tumble after a sharp rejection at $9,000 resistance, driving the price down as low as $8,000. Within the hour BTC plunged again to $7,700 before recovering to prices just below $8,000. Is this the pullback analysts have been forecasting?
Bitcoin is down 8.7 percent in the last 24-hours. OpenMarketCap posts 24-hour real BTC volume of $2.4 billion while CoinMarketCap indicates reported volume of $22 billion.
The sudden fall in prices follows rejection at $9,000 support on May 30. The drop has erased all of the gains from May 26, which saw the price shoot up from just below $8,000 to above $8,800 and testing $9,000 resistance three times before plummeting.
The consensus among crypto traders on Twitter is bearish or uncertain. Josh Rager asserts that the CME Bitcoin futures gap may offer support at $7,175 as prices fall.
$BTC – Daily close Bearish
Bitcoin continues to push down quite agressively and would like to see a move above $7824 and hold
Eyeing that previous CME futures gap that wasn’t explored at $7175
If Bulls don’t step in, I believe price is heading that way pic.twitter.com/fB9ew8qyz3
— Josh Rager 📈 (@Josh_Rager) June 4, 2019
Luke Martin pointed out that this is the first major retest of $8,000 since the beginning of the two-month uptrend.
Not the daily close $BTC bulls wanted to see.
This retest breaking is one of the first during the 2 month uptrend.
Want to wait and let the dip continue to unwind before looking for that next swing… pic.twitter.com/NGVy2wS4Ib
— Luke Martin (@VentureCoinist) June 4, 2019
Meanwhile, The Crypto Monk, who was bullish up until the rejection from $9,000, had his position invalidated with the break of $8,000 support.
⛔️ I N V A L I D A T E D ⛔️ pic.twitter.com/tMLIOYNdeX
— The Crypto Monk ⛩ (@thecryptomonk) June 4, 2019
That said, several analysts have said price corrections are normal during bull runs.
Crypto Quantamental, another popular Twitter account lead by an experienced Wall Street portfolio manager, said short-term drawdowns are “normal and expected” in a bull run.
The analyst also noted that Bitcoin’s volatility enables sharp drops in price even during major upward rallies, a trend that was first noticed during the bull market of 2017. The tweet was accompanied by a chart showing just how common these drops are.
For those that weren’t around in the bull market in 2017, these sorts of drawdowns are normal and to be expected. Bitcoin is insanely volatile and will test your will. I’m not saying we are in a big “BULL”, but if it is, expect this
See below for ~24hr drops in the last bull pic.twitter.com/AO4txhixNz
— Crypto Quantamental (@CryptoQF) May 17, 2019
As suggested yesterday by CryptoSlate’s market analyst Ali Martinez, “bitcoin could be preparing for a correction that could take its market valuation down to around $6,000. A reversal candlestick pattern that formed last week and a combination of the TD Sequential Indicator, the RSI and the StochRSI are all indicating that a pullback is likely.”
It seems that pullback is materializing.