- Summary:
- The Bitcoin price is mapping a path to $10,000 and below following the sharp downward trend yesterday. This is evidenced by the bearish flag and H&S pattern
Bitcoin price (BTCUSD) is crawling back after falling sharply yesterday. The digital currency is up by about 0.32% and is trading at $10,443. That is higher than the yesterday’s low of $10,198. Other digital currencies are also rising, with Ethereum and Ripple prices rising by more than 0.20%.
The price of Bitcoin declined sharply yesterday as part of the wider drop in most assets. Indeed, the Dow Jones and the Nasdaq 100 lost close to 2% of their value. Similarly, in Europe and Asia, all indices dropped. The same situation happened in the commodities market, where gold, silver, and crude oil prices tanked.
Not every asset declined though. The US dollar index rose by more than 0.50% while the CBOE volatility index rose by more than 1%. The dollar and BTC usually have an inverse relationship, which explains the discrepancy in the pricing.
Something else happened in the Bitcoin industry on Sunday. Data from Glassnode shows that Bitcoin had its biggest mining difficulty adjustment on record. This happens when the hashrate declines leading to a longer release of the next block. As a result, it leads to longer wait times for miners and lack of profitability.
This situation is part of the so-called ‘death spiral’ of Bitcoin. The argument is that as Bitcoin mining becomes more unprofitable, more miners will abandon the industry, leading to a shortage of the currency. The demand and supply dynamics are part of the reason why Bitcoin enthusiasts love it. Another major happening is that the world’s first Bitcoin ETF is about to be launched at the Bermuda Stock Exchange by Hashdex and Nasdaq. Previous attempts to launch such an ETF in the US have failed.
Bitcoin price technical analysis
The daily chart shows the magnitude of Bitcoin price decline yesterday. The chart also shows that the price has struggled to move above the resistance level between $12,066 and $12,438. Further, the chart shows that the pair has formed a bearish flag pattern that is shown in red. It also seems to have formed, albeit small, a head and shoulders pattern.
Therefore, it seems like the pair is on a downward path, which could see it continue moving below $10,000. On the flip side, a close above $11,222 will invalidate this trend. This price is along the upper side of the bearish flag pattern.
BTCUSD technical chart
