Bitcoin (BTC) price fell 7% in less than two hoursand liquidated more than $ 100 million in long positions on September 3. Only in BitMEX, The sudden drop wiped out nearly $ 99 million longs.
It’s likely, that Three key factors drove the price of Bitcoin down:: Miners exits, the strength of the US dollar and great resistance.
As reported today Large mining pools have been sending more than normal amounts of BTC to the exchanges in the past few days.
Bitcoin output from the main mining pools. Source: CryptoQuant
The data showed that miners were preparing to sell their Bitcoin holdings, which increased selling pressure on the markets. Ki Young-Ju, CEO of CryptoQuant, wrote::
“Miners regularly send a certain amount of BTC to the exchanges, so they already have a large amount of BTC there. Every time they decide to sell, they seem to be shifting a relatively significant amount of BTC to other wallets, with some of them going on exchanges. “
Miners, along with exchanges, are one of two sources of external selling pressure in the Bitcoin market. When the miners start selling their properties could put significant pressure on BTC.
US dollar rally
In the past three days The US dollar has rallied against other reserve currencies. The dollar showed particularly strong momentum against the euro.
As Cointelegraph reported, The European Central Bank (ECB) warned that the euro had become too expensive. The ECB’s warning shook the markets. cause a liquidation of the euroas investors feared the imposition of restrictions.
As the dollar began to rebound from a multi-year support area, Both Bitcoin and Gold fell dramatically.
BTC faced strong resistance
The range of $ 12,000 to $ 12,500 has been a strong resistance area for Bitcoin since 2018.
Bitcoin daily price chart. Source: TradingView.com
BTC price tested the $ 12,000 resistance level for the fourth time in a relatively short period of time. This could have sparked a backlash among sellers and contributed to Bitcoin’s withdrawal.
However, the price of BTC fell to $ 10,625 on major exchanges. Tekila sauce, Pseudonym of a well-known trader, said This is an important level of support over a period of time, which suggests A recovery is likely in the short term.
Where do traders see the price of BTC?
Short term, Traders generally expect a rally to $ 11,200. A decline to $ 11,200 would confirm the level as an area of strong resistance, while a rebound would indicate a bullish continuation.
Michael van de Poppe, Full time trader on the Amsterdam Stock Exchange, said::
“The split took place and we reached the next level. It was a painful fall for me too, but I won’t cry in a corner. A rally to USD 11,200 is expected, with the highs also recovering. However, $ 11,200 is a critical threshold. “
A cryptocurrency trader, Scott Melker, An ideal scenario would be a small decline followed by a steady recovery. Commented::
“My ideal $ BTC trade here would be a break in the dip, a reset of the RSI within 4 hours of overselling, another dip showing the RSI is making a higher low, and then a full breakout on an oversold bullish Div. “