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Bitcoin price drops to $ 8,840, according to a key metric that BTC could further correct itself

May 25, 2020

In the last hour, the price of Bitcoin (BTC) fell to $ 8,840. The drop occurred less than 8 hours before the weekly completion.

Bitcoin, a confluence of miners who sell more BTC than they mine, is at 6 lows in a row, and the $ 8,800 resistance level makes BTC vulnerable to a severe retreat.

Six consecutive highs since June 2019

As shown on the daily chart, Bitcoin has hit six consecutive highs since June 19. The price was declined at $ 14,000, $ 13,300, $ 12,300, $ 10,600, $ 10,500 and $ 10,000, making each new high below the previous high.

Bitcoin price drops to $ 8,840, according to a key metric that BTC could further correct itselfBitcoin price drops to $ 8,840, according to a key metric that BTC could further correct itself

In technical analysis, the maximum lows indicate that buyers are not establishing a new upward cycle. Every time a minimum is reached, it becomes apparent that the selling pressure in the market is simply too strong to get out of it.

Bitcoin has registered six consecutive lows since June 2019. Source: Tradingview

A clear rejection in the $ 9,800 to $ 9,900 range and the third scheduled test at the $ 8,800 support level indicate that Bitcoin is not yet ready to rally over $ 10,000.

The triple test of $ 8,800

Bitcoin’s price rebounded at $ 8,400, testing the $ 8,000 support area for the second time in four days. Digital assets generally tend to fall below a high level of support at the third or fourth touch. This means that BTC is likely to expand significantly to $ 8,800 by the end of the week.

Almost immediately after the fall of nearly $ 8,800, the price of Bitcoin rebounded to around $ 8,900, indicating that BTC is set for a short-term price hike after the weekly opening on May 25th.

TradingLite data shared by cryptocurrency trader Hsaka, however, has a significant number of OKEx sell orders in the range of $ 9,300 to $ 9,400.

OKEx shows large sales orders at $ 9,300. Source: Hsaka

Based on buyers’ firm reaction to the $ 8,800 support level and selling pressure of $ 9,300, BTC should remain in the $ 8,800 to 9,300 range before the next withdrawal.

If Bitcoin’s price jumps below the $ 9,000 region in the short term and hits $ 8,800 again, the likelihood that BTC will see a much larger correction of the $ 6,000 to $ 7,000 range increases.

Bitcoin miners are committed to selling

Bitcoin miners continue to sell more BTC than they mine. Such a trend is understandable since the cost of BTC mining after halving on May 11 is over $ 12,000.

Bitcoin’s price is not close to $ 12,000. This means that miners will have to sell part of their existing supply to cover operating costs.

As cryptocurrency investor Willy Woo explained, there are two unsurpassed sellers in the Bitcoin market: miners and exchanges. Woo said::

“There are only two unsurpassed selling pressures on the market. (1) Miners who water down the supply and sell it on the market is the hidden tax of monetary inflation. And (2) Exchanges that tax traders. And sell on that Market.

Bitcoin miners’ mobile inventory over 103% Source: ByteTree

As shown in the table above, mine workers’ Mobile Inventory (MRI) is over 103%, meaning miners spend more BTC than usual. This means that sales pressure from miners will continue to jeopardize BTC’s recovery in the short term.