Bitcoin enters consolidation period awaiting for major price movement.
Following an 18% downswing during the first five days of September, the flagship cryptocurrency seems to have entered a consolidation period. Since then, its price has mostly traded between the $10,000 support and the $10,500 resistance level without providing a clear signal of where it is headed next. The ongoing stagnation phase is visible in BTC’s 4-hour chart, where the Bollinger bands were forced to squeeze, which indicates low volatility.
The lackluster price action that Bitcoin is going through was also seen during Tuesday’s, September 8th, trading session. The pioneer cryptocurrency kicked off the day at a high of $10,377.50 and quickly began trending down. Over the next 12 hours, BTC saw its price decline by nearly 4.40% to test the $10,000 support zone.
Although Bitcoin dropped to a low of $9,921.73, this price hurdle could hold and contain it from a steeper correction. The appearance of a green nine candlestick on the hourly chart suggested that BTC was poised to rebound, based on the Tom Demark (TD) Sequential indicator. As buy orders began to pile up, the bellwether cryptocurrency surged by 2.55%, but the 50 moving average within this time frame was able to stop rising prices at bay.
The rejection caused Bitcoin to retrace towards the $10,000 support level, which served as a strong barrier once again. As a result, BTC was able to rebound and close the day trading at $10,123.96. Despite the low levels of volatility, investors took a 2.42% loss throughout Tuesday’s trading session.
Ethereum Incurred Over 4% in Losses During Tuesday’s Trading Session
Like Bitcoin, Ethereum seems to be consolidating within a narrow trading range after the 37% downswing it experienced between September 1st and September 5th. But this price pocket appears to have gotten narrower on Tuesday, September 8th, despite high levels of interest the smart contracts giant has generated over the DeFi boom. Prices continued making a series of lower highs while the $330 support level was held throughout the day.
The second-largest cryptocurrency by market capitalization opened at a high of $353.49, but the selling pressure behind it immediately started rising. As many sell orders were placed across different cryptocurrency exchanges, Ether’s price took a 6.45% nosedive that extended until 11:00 UTC. By this time, ETH had reached a low of $330.68, which was able to hold.
A bullish impulse followed the rejection from this crucial price hurdle. Ethereum was able to surge nearly 4.80%, recovering some of the losses incurred. After hitting a high of $346.46, it seems like the bears regained control of the price action pushing ETH back to the $330 support level.
As Tuesday’s trading session was coming to an end, it seems like some sidelined investors re-entered the market. The spike in demand around such a critical support zone was significant enough to allow prices to rebound. What came next was a 1.93% upswing that saw Ether close the day at $338.51, providing investors a negative daily return of 4.24%.
Indecision Reigns In the Crypto Market
When looking at the top two cryptocurrencies by market capitalization from a technical perspective, it seems like they have developed bear pennants on their daily charts. This technical formation is quite pessimistic because it suggests Bitcoin could drop to $9,000 and Ethereum towards $250. Such a bearish scenario would likely shake out even the most optimistic investors in the space.
Nonetheless, different on-chain metrics reveal that many large investors have been “buying the dip”. The number of stablecoins being transferred to exchanges has increased significantly as prices were falling while the number of addresses with at least $10,000 in USDT has been plummeting fast. This data suggests that BTC and ETH’s buying pressure has been increasing even though it has not been reflected in prices.
Only time will tell whether Bitcoin‘s $10,000 support and Ethereum‘s $230 support level will hold to avoid a further downturn.
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