Bitcoin is Just an Inch Away from Starting a Nosedive to $7,000; Here’s Why
Bitcoin and the aggregated crypto market are currently stabilizing following the turbulence seen yesterday.
This volatility allowed Bitcoin to break out of its tight trading range and secure a position above its previous range highs of $9,300. Concurrently, most altcoins shed some of their value.
Now that the dust has settled and BTC is entering what appears to be another consolidation phase, analysts are noting that the cryptocurrency is trading at a pivotal point.
One trader explained in a recent tweet that a daily close above $9,300 would be positive for the digital asset, but another break below this newly formed support could be all that is needed to send it reeling down towards $7,000.
Immense volatility could be imminent, and a massive spike of inflows into derivative exchanges seems to confirm this notion.
Bitcoin Stabilizes Above $9,300, But Expect Volatility to Start Ramping Up
At the time of writing, Bitcoin is trading down slightly at its current price of $9,350.
The cryptocurrency has been trading at this price level throughout the past day after failing to surmount the resistance it found within the mid-$9,400 region.
It is important to note that yesterday’s slight push higher was significant due to it allowing the crypto to break out of its tight trading range formed between $9,100 and $9,300.
Where the crypto trends next may largely depend on whether or not it can continue maintaining above this price region.
Likely, the relatively quiet market conditions that have ensued as a result of BTC’s stability will soon disappear.
In addition to seeing squeezing Bollinger Bands and historically low volatility, Bitcoin inflows into derivative exchanges are spiking.
One analyst offered a chart showing the notable surge in inflows that these platforms have seen as of late, noting that it “should be a fun few days.”
“BTC – Lets not forget derivs inflows… Should be a fun few days,” he explained while pointing to the chart seen below.
Image Courtesy of TraderXO.
BTC Could Soon Dive Lower if It Breaks Below $9,300
While speaking about the importance of $9,300, another analyst explained that Bitcoin’s reaction to this level could determine its near-term outlook.
He notes that a close beneath this level today would open the gates for it to see a decline towards $8,500 or even $7,000.
“BTC: Close above that red line today ($9300) and I might reconsider my short term bearish bias (mid-term bear bias remains). Close below and I’ll consider shorting more aggressively targeting the green line ($8500) first and green area second (~$7000),” he explained.
Image Courtesy of DonAlt. Chart via TradingView.
How Bitcoin closes today could have a significant impact on its mid-term outlook.
Featured image from Unsplash. Charts from TradingView.