Bitcoin Price Pumps, Then Dumps Below $7K Mirroring S&P Futures

Published at: April 13, 2020

Bitcoin (BTC) price has again dropped below $7,000 and at the time of writing the digital asset is struggling to hold above $6,700. The sharp downside to a new weekly low at $6,575 occurred despite an exciting Easter Sunday, which saw Bitcoin price drop to $6,772, then abruptly rebound to $7,176. 

As reported earlier by Cointelegraph, top crypto traders now expect the price to drop lower to $6,400 before possibly retesting $5,800.  

Crypto market daily performance. Source: Coin360

Data from Skew also shows that the abrupt correction lower led to the liquidation of $29 million in leveraged long positions at BitMEX, suggesting short-sellers interpreted Bitcon’s failure to top $7,200 as weakness and an opportunity to open short positions in anticipation of a pullback below $6,900. 

BitMEX XBT USD Liquidations. Source: Skew

Reclaim $6,800 or a $5,800 retest is on the cards

BTC USDT daily chart. Source: TradingView

The move to $7,176 was encouraging but the price rejected right at the 50-day moving average, meaning the necessary push above $7,200 or a close at $7,000 failed to occur.

For the short-term, reclaiming $6,800-$6,900 would be a positive step in the right direction and at the time of writing the price is attempting to push through the volume profile visible range shows a high volume node in this range. 

BTC USDT 4-hour chart. Source: TradingView

In the 4-hour timeframe, traders will notice that retaking $6,750 will bring the price above the moving average of the Bollinger Band indicator and currently the Relative Strength Index is pulling back up after dropping to 37.57. 

Traders will now watch to see if Bitcoin either retakes $6,800 to make another attempt at a close above $7,000, or $6,750 now serves as resistance and traders have to contend with the price dropping to underlying supports at $6,400 and $6,200. As mentioned in an earlier analysis, a drop to $6,200 increases the likelihood of a $5,800 retest or even a drop below $4,000 again. 

Aside from Bitcoin’s technical setup, there are other developments that could impact the crypto asset’s price action. On Sunday, U.S. President Donald Trump tweeted that he had personally brokered a deal that would end the oil war between Russia and Saudi Arabia. 

According to the latest reports, OPEC and associated allies will cut production by 9.7 million barrels per day and the reduction represents the single largest cut in output in history. After the announcement of the deal oil futures traded higher but at the time of writing, futures for the Dow and S&P 500 are down 1.51% and 1.50%, respectively.

CME Bitcoin Futures (BTC1!) compared to S&P500 Futures 6-hour chart. Source: TradingView

Interestingly, as the S&P 500 and Dow futures dropped, CME Bitcoin futures also dropped, reinforcing the oft-discussed correlation between Bitcoin price and major equities markets. 

Given the correlation of major markets to Bitcoin price, traders will also be closely watching the opening bell later this morning to see if this has any bearing on the top cryptocurrency.  

Bitcoin daily price chart. Source: Coin360

As the price of Bitcoin dropped, a number of top-10 altcoins mirrored the losses. Ether (ETH) pulled back 2.40%, Litecoin (LTC) lost 4.33% and EOS dropped by 3.16%. 

The overall cryptocurrency market cap now stands at $191.7 billion and Bitcoin’s dominance rate is 64.1%.

Keep track of top crypto markets in real time here
Tags
Bitcoin
Bitcoin Price
Markets
Market Analysis
Related Posts
Bullish Bitcoin newsflow gives bulls a boost ahead of Friday's $565M options expiry
On Friday, June 11, a total of $565 million in Bitcoin (BTC) options are set to expire. This is significant because the last couple of weeks have been a massive deception for bulls. After all, the price was struggling to sustain the $33,000 support. However, an unexpected bullish turn of events led to an 18.5% hike from the $31,000 low on June 8 to $38,491 today. This strong move saved the bulls because any level below $34,000 would have wiped 98% of the current call (buy) options. Who saved the day? First, MicroStrategy, a publicly-traded company that holds over $3.2 …
Bitcoin / June 10, 2021
Bitcoin On-Chain Data Suggests Miners Expect Halving to Pump BTC Price
As the coronavirus pandemic continues to unfold and new signs of lockdowns beginning to be slowly lifted in Europe, all eyes in the crypto community are back on the Bitcoin (BTC) halving. The event is only 10 days away, and Bitcoin’s price seems to be acting accordingly, having surged an incredible 23% to a monthly high above $9,400 earlier this week. A widely celebrated event in the cryptocurrency industry, the halving is part of the Bitcoin monetary policy, in which every four years, the Bitcoin mining reward is cut in half. This means that on May 11, 6.25 BTC will …
Bitcoin / May 1, 2020
Did BTC Miners Crash Bitcoin Price With 51 Days Before the Halving?
Bitcoin (BTC) price has started to show strength in its recovery since the black Thursday selloff this past week, but is this something we can expect to continue? Or is this a dead cat bounce on the way down to lower lows? In today's analysis I’m looking not only at the charts, but also at the possibility of large Bitcoin miners being the cause of the 50% price drop on March 12, after supporting data emerged last week suggesting that short-term holders sold a whopping 281,000 BTC, which resulted in the crash. Daily crypto market performance. Source: Coin360.com Did miners …
Bitcoin / March 22, 2020
Elon Musk, Cathie Wood sound 'deflation' alarm — is Bitcoin at risk of falling below $14K?
Bitcoin (BTC) has rebounded by 20% to almost $22,500 since Sep. 7. But bull trap risks are abound in the long run as Elon Musk and Cathie Wood sound an alarm over a potential deflation crisis. Cathie Wood: "Deflation in the pipeline" The Tesla CEO tweeted over the weekend that a major Federal Reserve interest rate hike could increase the possibility of deflation. In other words, Musk suggests that the demand for goods and services will fall in the United States against rising unemployment. A major Fed rate hike risks deflation — Elon Musk (@elonmusk) September 9, 2022 Rate hikes …
Bitcoin / Sept. 12, 2022
Total crypto market cap falls to $840 billion, but derivatives data shows traders are neutral
The total cryptocurrency market capitalization dropped 1.5% in the past seven days to rest at $840 billion. The slightly negative movement did not break the ascending channel initiated on Nov. 12, although the overall sentiment remains bearish and year-to-date losses amount to 64%. Bitcoin (BTC) price dropped 0.8% on the week, stabilizing near the $16,800 level at 10:00 UTC on Dec. 8 — even though it eventually broke above $17,200 later on the day. Discussions related to regulating crypto markets pressured markets and the FTX exchange collapse limited traders' appetites, causing lawmakers to turn their attention to the potential impact …
Bitcoin / Dec. 8, 2022