BTC/USD dropped to lows of $ 9,850 before bulls vigorously defended the important $ 10,000 peg
Bitcoin continues to hold the $ 10,000 support area despite a late Tuesday dip that took prices below $ 9k and saw investors brace themselves for a retest of prices near $ 9,700.
A pullback from highs of $ 12,400 to lows of $ 10k is not at all surprising given historical price action. However, the drop happens alongside a broader retracement in the equities market, especially with tech stocks that have continued to plunge over the past week.
However, it’s not just the bitcoin-stocks correlation factor analysts are looking at here. There’s something called a CME gap, which is the difference in price at close on Friday for the conventional CME Futures exchange and where markets open when trading resumes.
Since BTC/USD trades happen around-the-clock, gaps may appear if the price shoots or falls over the weekend.
Historically, Bitcoin’s price has retraced 95% of the time in the days and weeks after a gap to “fill” it. The latest such gap appeared when BTC/USD raced to highs of $ 10,000 on the weekend of July 25-26 after the derivatives marketplace closed on July 24, with the top cryptocurrency trading around $ 9,665.
Bitcoin bulls defend $ 10k
Despite yesterday’s dip taking Bitcoin to lows of $ 9,850, bulls aggressively bought the dip during the Asian trading session. BTC/USD shot back above $ 10k after bears staged an unsuccessful attempt around $ 9.9k.
Bitcoin has printed higher lows and lower highs on the 4-hour charts, currently trading around $ 10,100. If bulls hold the support level and prevent a retreat to 24-hour lows, BTC/USD could aim for another leg up.
The psychological $ 10,500 provides the next major hurdle, with further upsides likely to face seller rejection at 50-MA around $ 11,199.
On the downside, a leg down during the European and US trading sessions could see bulls forced to defend $ 9,800 again. If the level falls to the bears, an oversold RSI would accelerate the dip to the $ 9,800-$ 9,700 level. Beneath this area, bears could aim for the 200-MA on the daily charts at $ 9,092.