Bitcoin suffers its largest one-day decline since January 2018
Bitcoin suffered its largest one-day decline since January 2018 on Wednesday, as the broader cryptocurrency market came under heavy downside pressure. The BTC/USD pair tumbled close to twenty percent on an intraday basis, as the number one cryptocurrency by market capitalization fell below the $8,000 level.
The altcoin space suffered the worst of the selling, with popular cryptocurrencies such as Ethereum and Litecoin falling below key moving averages and eroding close to twenty-five percent in value. The reason behind the sell-off in Bitcoin was largely attributed to technical selling, although lighter-than-expected trading volumes during the summer months had sent a warning to investors that a large trending move was on the horizon.
Bitcoin has been trading in an extremely narrow range for much of the summer, with the BTC/USD pair also seeing a rapid decline in trading activity since peaking around the $14,000 level earlier this year. Bitcoin has become renowned for strong technical breakouts, following periods of extreme price consolidation.
Earlier this week, cryptocurrency exchange Bakkt had opened the first physically delivered Bitcoin futures trading platform, which was seen as bullish for the cryptocurrency market. Early reports suggested that trading volumes had been extremely light during the first few days of business, which many traders have taken as a bearish signal.
The upcoming halving event for Bitcoin and the U.S Securities and Exchange Commission’s decision on two potential Bitcoin ETF’s are the next major fundamental events for the largest cryptocurrency by market capitalization. Going forward, Bitcoin will need to trade above the psychological $10,000 level to regain investors confidence about the continued appreciation of its trading value.
BTC/USD Daily Candlestick Chart | Source ActivTrader
Bitcoin’s 200-day moving average is now absolutely key going forward, further weakness below this key technical metric and the BTC/USD pair will slump into a bear trend. The psychological $9,000 level now provides key technical resistance if a short-term recovery happens from current levels.
Written by Nathan Batchelor, External Analyst, ActivTrades
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