- Bitcoin seems headed to the $9,500 major support zone.
- Ethereum has also dropped to $380 after hitting a high of $486 earlier in the week.
- The drop could be due to the weakening of the dollar against major fiat currencies.
In less than 24 hours, Bitcoin (BTC) has dropped by 5% from a high of $11,950 to trade at $10,115 at the time of writing. The bulls had taken over the market since July when the world’s largest crypto has been on an uptrend. But today’s price is the lowest since the end of July 28. Earlier in the week, BTC had tested the crucial $12,000 resistance but failed and seems to be headed for the $9,500 support.
The CEO of BitBull Capital, Joe DiPasquale, believes that the crash is technical. He commented,
“The current move is technical in nature and comes after prices tested the $11K support around eight times in the last 30 days.”
He added,
“As highlighted in our previous comments, there is strong support in the zone between $10K and $10.5K, and prices are yet to test that zone. We don’t think we will see any major declines that will break this support zone in the short term, and Bitcoin is likely to consolidate between $10.5K and $11K before attempting to cross $11.5K again,”
Impact on other coins and the dollar
As usual, the crash in Bitcoin’s price is also felt in the prices of other altcoins as most of them are in the red zone. The second-largest cryptocurrency by market cap, Ethereum (ETH), has also dropped to $380 after hitting a two year high of $486. Most other altcoins have dropped remarkably in the latest crash.
The latest crypto blood bath seems to correlate with a drop in the US Dollar against other major fiat currencies. Danial Kiva, the CEO of Invest Diva, believes that the weakening USD could be the one pushing the price of BTC down. She commented about the latest crash by saying,
“The USD appears to have bottomed out across major fiat currencies including the Canadian dollar and the Swiss Franc. So the strength of the US dollar could certainly be one of the reasons why Bitcoin’s price is dropping.”
Could this signal a bear period?
At the moment, the sellers seem to be in control. However, $9,500 has proved to be significant support for Bitcoin, and the coming week may test it again. A bounce back above $10,000 is imminent since some analysts believe that the diminishing supply of Bitcoin after the halving will drive the prices up above $12,000.
Author: Jinia Shawdagor
Read more at: https://invezz.com/news/2020/09/04/crypto-market-crashes-as-bitcoin-sheds-over-5-percent-in-24-hours/
