Bitcoin could be at risk of crashing towards $8,800 this month, according to a pseudonymous analyst.
The downside prediction came after the cryptocurrency’s latest failed attempt at breaking above $10,000. On Wednesday, the BTC/USD exchange rate briefly closed above the said resistance level. Nevertheless, the pair shed gains quickly after topping near $10,018, falling by more than $300 within just five minutes.
It was Bitcoin’s sixteenth attempt at closing above $10,000 since February 2020. The cryptocurrency’s repeated failure to establish a bullish bias in the six-figure range led some analysts to predict a breakdown scenario.
One of them noted that bitcoin could hold above $9,800 for a while. But if the level fails as support, the cryptocurrency could extend its downside momentum by another $1,000. As shown in the chart above, bitcoin broke below the $9,800-support in the early morning London trade Thursday.
First $9,200, Then $8,800
The pseudonymous analyst highlighted Bitcoin’s extended move below $9,800 could first test $9,200 as its potential bounce-back level. The horizontal line – so far in June 2020 – served as a crucial support to Bitcoin’s repeated pullbacks from $10,000.
Failure to hold $9,200 would expose Bitcoin to retest $8,800, a level that capped the cryptocurrency from extending its pullbacks throughout April 2020 and May 2020.
“If 9.8k fails here, [it] might be time to complete the final leg of this flat,” the analyst wrote, adding that the support levels could allow traders to recoup back towards $10,000. Excerpts:
Prominent analyst Mohit Sorout also made a similar prediction earlier Thursday. The India-based cryptocurrency trader said that there is evidence of high buying interest among traders near $9,445 and $8,622.
The $10K Bitcoin Glitch
Bitcoin’s $10,000-level has become a battleground for spot and derivative traders. While the retail-demand pushes the cryptocurrency spot rate towards the six-figure valuation, it stays above the level only for a brief period. Part of the reason is over-leveraged buy liquidations near $10,000.
It happened on Wednesday. As spot bitcoin closed above $10,000, it ended up causing a $15 million buy liquidation. That means derivative traders did not expect the price to breach the resistance level and, therefore, closed their short positions forcibly.
The same happened on June 2, wherein BitMEX liquidated $133 million worth of buy liquidations.
Nevertheless, Chris Thomas of Swiss Quote Bank believes that bitcoin will overcome the glitch to attempt a close above $10,500. The head of digital assets said:
“There’s a little resistance around $10,500, then our next targets are $12,300 and $13,000.”
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