Bitcoin bulls were hit with a fall in prices today of almost $700, despite an optimistic medium-to-long term outlook for the cryptocurrency. The world’s biggest cryptocurrency fell back to near $9,500, before rebounding to just over $10,000. At the time of writing, Bitcoin was trading at $10,012, still down 6.5% on the day.
The news comes just a matter of days after bitcoin was testing highs beyond $11,000. This could indicate a consolidation by investors around these levels.
The reversal of fortunes for the cryptocurrency is unexpected after strong rallies in recent months. According to some analysts, trade in the coming hours and days will either confirm or reject the emergence of these less optimistic trends.
CoinDesk analyst Omkar Godbole said the slide indicates a potential slip back to $9,467, the last tested low on August 15.
“Bitcoin quickly fell from $10,842 to $10,082 earlier today, confirming a rising wedge breakdown on the hourly chart. The bearish reversal pattern has opened the doors for a retest of $9,467 (Aug. 15 low). On the way lower, prices may find support at the 100-day moving average, currently at $9,882. The average served as strong support earlier this month.”
However, Godbole said investors should be mindful of a rise above $11,000 in the forward 24 hours of trading. While noting this appears unlikely, he said a rise beyond $11,000 or $12,000 would refute the trend.
“The bearish case would be invalidated if prices rise above $11,000 with high volumes in the next 24 hours. As of writing, that looks unlikely. A convincing move above $12,000 is needed to revive the bullish setup, as per the weekly chart.”
The reports come at a time when the analysis is showing the weakest levels of support for six months, as bitcoin blends within its recent trading range.
Investors hoping for a strengthening of the position in the coming weeks. This is amid widespread expectations of the traditional rally in Q3/Q4. They should hold on new investment for the time being, until the bearish Bitcoin decline pattern is invalidated.